You will encounter the term Stamp Duty when buying a property in Australia. In this post, we’ll dive deep into stamp duty, how it is calculated, and how you can get exempted.
What is stamp duty?
Stamp duty, in a nutshell, is a state tax that applies when you’re purchasing a home or property. When buying a dwelling in Australia, you are typically required to pay stamp duty fees depending on the property price and other factors, such as whether the purchase is for residence or investment purposes.
Moreover, it is also called Transfer Duty and applies to properties you got as a gift or as a portion of your trust. Stamp duty fees come at a steep cost, so it’s vital that you carefully consider it on your first (or next) home purchase.
When do I need to pay stamp duty?
Depending on where you live, you will need to settle stamp duty payments upfront or up to 3 months of settlement.
- Australian Capital Territory – Within 28 days after settlement
- New South Wales – Within 3 months after property transfer/settlement
- Northern Territory – Within 60 days of settlement or transaction
- Queensland – Within 1 month of settlement
- South Australia – Upfront/upon settlement
- Tasmania – Within 3 months of title transfer/settlement day
- Victoria – Within 30 days of title transfer/settlement day
- Western Australia – Within 2 months after settlement
Speak with a mortgage broker specialising in home loans so you don’t miss out on stamp duty payment deadlines. But if the price seems too steep for you, knowing about government schemes and concessions could make a difference.
Are there stamp duty exemptions?
Every state and territory has stamp duty policies, concessions, and exemptions. Here are a few of them so you know which options are available to you and make informed decisions when planning to buy a property:
Stamp Duty for First-Home Buyers
If it’s your first time purchasing a home, always look out for available stamp duty exemptions or concessions in your state. Eligibility and grant offers will vary per state or territory. But it can save you thousands on your first home purchase!
Otherwise, we recommend seeking a professional to help you out. Home loan specialists who fluently understand home buying procedures can give you informed decisions on how to save from stamp duty through grants and other available options.
We’ll also check whether you qualify for First Home Owners Grant (FHOG) and save on other costs alongside stamp duty.
Pay less stamp duty for new homes
Stamp duty is computed depending on the property value when you buy it. But it’s slightly different when purchasing a block of land and constructing a new home on it.
In such cases, your stamp duty will only reflect the land value and will exclude your home. While the cost gap varies significantly depending on state or territory, you still save a lot more when stamp duty is computed solely on the land than when it reflects the land and dwelling.
Buying off-the-plan property
This option is becoming popular as more people buy properties in a large complex before it has been built. Off-the-plan purchases can qualify for stamp duty concessions since it’s one way to stimulate real estate development and encourage property development.
Stamp duty discounts for off-the-plan purchases may vary between state and developer. Nevertheless, if a local government actively promotes property development in the area, they may incentivise investors through stamp duty concessions.
Eligibility may vary between property and state. Check with your mortgage broker to discover whether you qualify.
Stamp Duty Policies by State
We understand you’ll stay stuck in a financial standstill without knowing how stamp duty works in your area.
For more information on how stamp duty applies in your specific state, please refer to your state’s website:
- Australian Capital Territory: https://www.revenue.act.gov.au/duties/conveyance-duty
- New South Wales: https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty
- Northern Territory: https://treasury.nt.gov.au/dtf/territory-revenue-office/stamp-duty
- Queensland: https://www.qld.gov.au/housing/buying-owning-home/advice-buying-home/transfer-duty/how-much-you-will-pay/calculating-transfer-duty/how-to-calculate-transfer-duty
- South Australia: https://www.revenuesa.sa.gov.au/stampduty
- Tasmania: https://www.sro.tas.gov.au/property-transfer-duties
- Victoria: https://www.sro.vic.gov.au/land-transfer-duty
- Western Australia: https://www.wa.gov.au/organisation/department-of-finance/transfer-duty
How is stamp duty calculated?
While its cost varies between state and territory, stamp duty is generally calculated as a percentage or portion of your purchase price. Intuitively, stamp duty fees will be low on typical residential properties and will increase for premium and high-end dwellings.
Moreover, some states charge higher stamp duty fees than others, and the gap can be in the thousands. Having insights from a specialist mortgage broker is crucial since you’ll need every bit of market info to discover where and how you can save the most in the long run.
Benefits also seem to go hand in hand with costs. When you shop for homes and compare their fees with different states, you’ll find that first home buyer benefits vary greatly between locations.
Weighing the costs and benefits along with long-term savings will significantly complicate your pool of choices. You can discuss available options with our senior mortgage brokers and we’ll help you maximise your benefits while cutting down on stamp duty fees.
What if I’m gifted property or buy it below its market value?
Who wouldn’t love receiving property as a gift, right? Or if you’re buying from a family member, you may get an exclusive discount!
But what does that say to your stamp duty when transferring the property to your name?
When this happens, the property will still need to undergo stamp duty valuation and pay the computed duty fee on the property’s market value and not for how much you got it.
Make informed decisions with a mortgage broker
By partnering with a senior mortgage broker, save yourself from the legwork and negotiation. At Mortgage Pros, our home loan specialists will handle your paperwork and negotiate for exclusive rates from banks that work for you.
We can help you calculate how much stamp duty you’ll expect to pay from where you’re buying. Take the burden off your shoulders and let us carry you through the rest of the homebuying process!
Discover if you qualify for a home loan
Discuss your financial situation with our senior mortgage brokers at Mortgage Pros and we’ll work out if you have enough deposit and borrowing power to purchase your first home.
Get expert answers to your stamp duty queries, know about other fees, and how you can save up with home buyer grants and first-home loan guarantees.
Contact one of our mortgage brokers at 1300 030 388 and complete our assessment form to discover how you can get closer to your dream home.