IF you are in the market to buy a new home, chances are you have heard about stamp duty.
But do you really know what it means? And, most importantly, how much you will have to pay?
For many of us, stamp duty becomes an after-thought as we focus on the exciting business of finding our dream home.
But it is vital to consider stamp duty when budgeting for your property purchase – or risk facing a last-minute scramble to come up with the extra cash, right when you should be celebrating your new property purchase.
Stamp duty, or transfer duty as it is also known, is simply a tax or levy imposed by all state and territory governments on certain transactions, including the sale of property.
The rate payable is determined by either the value of the property or the purchase price (whichever is higher), with a more expensive property attracting a higher rate of stamp duty.
The purchaser must pay stamp duty within 30 days of property settlement.
Not so simple – each state or territory has a different duty structure, with various exemptions and concessions available for first home buyers.
In NSW, eligible first home buyers are exempt from transfer duty on homes valued up to $650,000, with concessions available for homes valued between $650,000 and $800,000.
Eligible purchasers buying vacant land valued up to $350,000 are also exempt from stamp duty, with concessions for vacant land valued between $350,000 and $450,000.
In Queensland, eligible first home buyers are exempt from stamp duty when purchasing a home valued up to $500,000, with concessions available for homes valued between $500,000 and $550,000.
Eligible first home buyers purchasing vacant land valued up to $250,000 are also exempt.
A First Home Owners Grant is also available in both states to eligible purchasers who are building or buying a brand new home.
We recommend consulting your state revenue office for more information on eligibility for concessions, and to calculate how much stamp duty you can expect to pay, so you can avoid any nasty surprises come settlement time.
‘Til next month…
Jason Abbott – Principal Coolangatta/Tweed