Your guide to stamp duty
If you have started looking into purchasing your own home, then you will have seen that the words ‘stamp duty” thrown around quite a bit.
But what exactly is stamp duty? We have all the essential fact you’ll need to know.
What exactly is stamp duty?
Stamp duty is essentially a tax that is imposed by the state you live in, for the sale of big-ticket assets like houses and cars. If you are thinking about buying a home, then you will most likely need to factor stamp duty in to your budgeting plans. It’s always good to investigate how much you are likely to need to pay, or if you even have to pay it at all!
Wait.. So, I might not have to pay any stamp duty?
Well, if you qualify as a first home buyer*, then you may be eligible to take advantage of stamp duty concessions related to the First Home Owners Grant in your state. All the states and territories (except Tasmania) have some form or concession or exclusion on stamp duty for first home buyers. Read on to found out what it applicable for your state.
- Western Australia
In WA, stamp duty concessions are applicable to first home buyers who purchase homes that are valued at less than $530,000 for a house or land package, or vacant land valued at less than $400,000.
First home buyers in Victoria won’t have to pay stamp duty when they buy a property valued at $600,000 or less and stamp duty concessions apply, on a sliding scale, to homes that are valued between $600,001 and $750,000.
- New South Wales
NSW first home buyers won’t have to pay any stamp duty on all new and existing homes that are worth up to $650,000 and will receive stamp duty concessions on a sliding scale, on homes that are worth between $650,000 and $800,000. For first home buyers buying vacant land, you won’t need to pay stamp duty on land valued up to $350,000 and concession rates on stamp duty are available for land valued between $350,000 and $450,000.
- South Australia
Off-the-plan stamp duty concession for any buyer who buys a “new or substantially-refurbished apartment” valued at up to $500,000 (subject to when contracts are entered into).
First home buyers in Queensland who buy a home valued less than $550,000 or land valued less than $400,000 can take advantage of stamp duty concessions.
- Northern Territory
Stamp duty concessions are available to NT first home buyers who buy an established home valued at up to $650,000.
For those in the ACT buying a new home or vacant land, from 1 July 2019 no stamp duty will be payable if the total gross income of the home buyers and their domestic partners for the financial year before the transaction date is below $160,000. Until that date, if the property in question is $470,000 or less, then no stamp duty need to be paid, and if it is worth between $470,000 and $607,000 you will be eligible to receive a concessional stamp duty rate.
How can I find out how much I’ll have to pay?
The way that stamp duty is calculated dependant on the type of home you buy. If you are buying an established home, then the stamp duty is calculated on the total purchase price (house and land) and is based on the greater amount between the price you paid for the property and the market value of the property. For example, if you’re the market value of your property is $500,000 but you did some clever negotiation and only paid $475,000, your stamp duty is calculated based on the $500,000 purchase price and vice versa.
For those purchasing a vacant block or a house and land package, then you will only be charged stamp duty on whichever is greater between the land value or purchase price, as long as the land is vacant when the land settles.
The rate of stamp duty is also variable between states and is affected if your property is valued over a certain price. One of the easiest ways you can get an idea of how much stamp duty you’ll need to pay is by using our handy home buying calculator.
If you want to learn more about stamp duty and how it will affect you on your home buying journey, get in touch with one of our experienced Resolve Finance mortgage brokers for everything you’ll need to know!
*Terms, conditions and eligibility requirements apply. Speak to your mortgage broker or financial adviser for more information.