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Everything You Should Know About Stamp Duty


Everything You Should Know About Stamp Duty

Have you heard about stamp duty, but you’re not 100% sure what all the fuss is about?

Put simply, stamp duty is part of the process if you buy property in Australia. However, this is also one particular tax that is frequently misunderstood by buyers.

As a result, it should be an area of finance you look to wrap your head around this year.

Knowing what stamp duty is - and how it affects your purchase - can save you money and more than a few headaches.

So if you’ve got questions like:

- What is stamp duty?

- How much is stamp duty?

- And where stamp duty cash ends up?

This article will answer them all (and then some!).

Let’s get right into it!


What Is Stamp Duty?

Stamp duty is one of many kinds of taxation.

This particular kind is applicable to multiple transactions. These include:

- Mortgages

- Registering motor vehicles

- Property transfers

Stamp duty is also something that might apply to particular gifts and even some insurance.

When a transaction is charged, the amount is dependent upon either the price that is paid or the property market value. It's always the greater of the two, and includes any GST. What this means is that as a property gets more expensive, the stamp duty will be higher.

For anyone buying interstate, or those who are new investors, the stamp duty is something that can be easily missed. That only results in it being an unwelcome surprise when the time comes to pay up.

For this reason, notes home renovation expert David Xiberras, “anyone considering a foray into the property market should remember stamp duty and include it in their budget”. David goes on to add “working with new home buyers constantly, I notice time and time again the uncertainty that comes with stamp duty which only ends up causing problems.”

Anyone that can calculate in advance what needs to be paid out can spare themselves a bit of stress over time.

Are you looking for a quick and free stamp duty calculator? Visit Mortgage Compare Plus and get stamp duty figures in seconds!


Who Pays Stamp Duty (and how much does it come to)?

In the realm of real estate, it's the buyer's responsibility to pay stamp duty.

Stamp duty isn't determined by the federal government, but instead by different states and territories. This results in variable rates.

Figuring out the amount needed to pay can get complicated given how each state handles things. One factor is that a handful of states offer first-time buyers alluring concessions. Another factor is that rates are more variable for anyone buying land.

Figure out how much your Stamp Duty is using a convenient calculator.


When Must You Pay Stamp Duty?

Stamp duty rates vary for each state or territory.

Correspondingly, so too does any time-frame that you have to pay. At the time of writing, this is how each state and territory handled such affairs...

ACT: Stamp duty is payable within four weeks of the settlement. Purchasers have to pay the stamp duty within two weeks of getting an Access Canberra Notice of Assessment.

Once Access Canberra gets the written document of the transfer instrument, the buyer is sent these details via email. Buyers then have two weeks following the settlement date to lodge their specific transfer instrument via Access Canberra.

NSW: Stamp duty must be paid no later than three months after the settlement. If a purchase happens 'off the plan', then buyers have to pay their stamp duty less than three months following the agreement completion.

NT: Stamp duty here is typically payable in the two months following the settlement or entry into the specific transaction, whichever happens earlier.

QLD: Stamp duty needs to be paid less than a month after settlement.

SA: Stamp duty is payable on the actual settlement day.

TAS: Stamp duty is payable in the 12 weeks following the transfer, and that typically happens on settlement day.

VIC: Stamp duty can be paid within the month following the property transfer, typically the settlement date.

WA: Stamp duty can be paid in the two months following settlement.

If you don't pay stamp duty in the provided time-frame, then you are likely going to face extra penalty interest and rates.


Do Any Exemptions Exist?

State and territory government exemptions vary with each place. However, common exemptions happen when property is changing hands between family members, via a divorce, or via a death.

The majority of governments also provide sizable concessions, such as a total exemption, for first-time home buyers.

For instance, at the time of writing, the state government of New South Wales was offering total exemptions up to as much as $650,000 to first-time home buyers.

At the same time, Victoria was providing the same buyers full exemptions, provided they bought a home (new or already built) worth as much as $600,000, and so long as they lived in that particular property for a minimum of a year. Stamp duty discounts were also available to anyone buying properties valued from $600,000 up to $750,000.


What Is Stamp Duty Revenue Used For?

State and territory governments collect stamp duty in order to invest back into the economy.

This revenue gets funneled into state government budgets to cover:

- Emergency services

- Justice costs

- Police

- Health services

- Roads and transportation

Are you looking for support in your next major financial decision? Chat to the experts from Mortgage Compare Plus for reliable and fast help.

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Author Bio:

Jack Poole is an Australian writer and business student living in Sydney. He is extensively knowledgeable in financial-related topics. Jack has a passion for the arts. When he’s not studying or writing, you’ll find him frequenting the art museum.

Disclaimer: This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.