Understanding Stamp Duty in Australia
What is it?
Stamp duty is a tax applied to a number of different types of purchases including real estate. It is also imposed on some gifts, insurance and home loans. Without getting too complicated, the higher the price of the property being purchased the more stamp duty you should expect to pay.
Who has to pay it?
If you are a new investor, stamp duty can be a very unpleasant surprise. You will need to include stamp duty in your calculations about how much you can afford to pay for a property. You can save yourself unnecessary stress by finding out at the beginning exactly how much stamp duty you are going to have to pay.
When does it have to be paid?
You have to pay stamp duty no later than 30 days after the property has been purchased.
What is stamp duty used For?
The territory and state governments that collect stamp duty spend the money as they please. State responsibilities include emergency services, justice, police, roads, transport and health.
How much will I have to pay?
The stamp duty rates vary because they are collected by territory and state governments rather than the Federal Government. Most territory and state governments do have an online stamp duty calculator that you can use. If you are a first time buyer you may have access to concessions and the rates may vary for those who are buying land.
Are there any stamp duty exemptions
Stamp duty exemptions are rare, however, they are available under exceptional circumstances including:
The death of a joint tenant
The death of a property owner
Change of tenure
Transfer of ownership to a husband or wife
There are also concessions that apply to stamp duty, these include:
Properties that are not purchased for investment purposes
Buyers who are purchasing a home for the first time
Before you purchase a property make sure that you speak to a financial advisor who will be able to tell you all you need to know about stamp duty, how much you should expect to pay and if you are eligible for any concessions.