• Your essential guide to stamp duty

    Your essential guide to stamp duty

    Just like paying 30 cents extra for soy in your latte, stamp duty is the unavoidable “add-on” cost of buying property in Australia.

    But while stamp duty – a tax on every property transaction imposed by each state and territory government – adds a hefty chunk to the cost of buying a property, there are exemptions and reduced rates for first home buyers across most states in Australia.

    Such exceptions and concessions are in addition to grants available through first home owner schemes.

    Your essential guide to stamp duty_Pic1 - chair and plant 
    There are stamp duty exemptions and reduced rates for first home buyers across most states. Picture: realestate.com.au/buy

    Stamp duty changes impact on the market

    Rachel Slekenics, a RAMS Home Loan Specialist from North Adelaide, says it’s vital buyers work out what stamp duty is payable on a potential purchase and to research if a reduced rate is available.

    “It’s important because stamp duties differ depending on the state you’re in and they have an impact on the deposit you will require,” she says.

    In Rachel’s home state of South Australia, a reduced rate of stamp duty is available to anyone, not just first home buyers, who buy a “new or substantially refurbished apartment”, valued at up to $500,000.

    Rachel says the rules and regulations for stamp duty concessions vary from state to state and buyers need to understand the conditions and restrictions.

    “You will need identification that correctly identifies you and your lender can lodge your application for this on your behalf as part of the home loan application process,” she says.

    Property guru, Frank Valentic, the founder of Melbourne-based buyers’ advocacy service, Advantage Property Consulting, says changes to stamp duty in Victoria have had a big impact on the market.

    “In Victoria, the government has completely removed stamp duty for first home owners buying under $600,000. That could mean up to $30,000 in savings, which is massive,” he says.

    Your essential guide to stamp duty_Pic2 - skyscrapers 
    If you’re a first home buyer in Melbourne, you won’t be paying stamp duty on property purchased for under $600,000. Picture: realestate.com.au/buy

    A reduced rate of stamp duty is also available, on a sliding scale, for first timers buying homes between $600,000 and $750,000. There are cash incentives to buy off-the-plan and in regional areas too.

    “In the first home buyer space, every dollar counts and we have seen these changes bring more buyers to the market. It has definitely helped,” Frank says.

    Frank – known across the country for bidding on behalf of clients at auctions on TV show The Block– says the eligibility criteria can be complex.

    “In Victoria, you have to move in within 12 months of buying, live there for at least a year and so on. You need to make sure you follow the rules in your state.”

    Stamp duty concession – state-by-state

    Here are some of the key points you need to know about stamp duty concessions as a first home buyer in your local state.

    New South Wales 

    • No stamp duty for first home buyers on all homes up to $650,000.
    • Stamp duty concession for first home buyers, on a sliding scale, for homes between $650,000 and $800,000.
    • For first home buyers buying vacant land, exemptions are available for land valued up to $350,000. Concessions are available for land valued between $350,000 and $450,000. 

    Victoria 

    • Exemption from land transfer duty (commonly known as stamp duty) for first home buyers who buy a property valued at $600,000 or less.
    • Stamp duty concession, on a sliding scale, for homes between $600,001 and $750,000. 

    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). 

    Queensland 

    Stamp duty concession for first home buyers who buy a home valued less than $550,000 or land valued less than $400,000. 

    Northern Territory 

    Stamp duty concession for first home buyers (known as First Home Owner Discount) who buy an established home valued at up to $650,000. 

    Tasmania

    No concessions or exemptions from stamp duty for first home buyers.

    Western Australia

    Various stamp duty concessions for first home buyers who buy homes valued at less than $530,000 for a house or land, or vacant land valued at less than $400,000.

    ACT

    Concessional rates of conveyance duty (commonly known as stamp duty) for homes and land. The amount of duty payable is dependent on the property’s and/or land’s purchase price or market value.

     

    Other conditions for stamp duty concessions can be explored on the relevant state government websites.

     


    Originally published on flatmates.com.au

     

    About the author

    • Raymond

      Raymond A Ram is the RAMbassador for RAMS Financial Group. Raymond works with the RAMS team to bring simple, helpful and expert information on home loans and savings accounts to life with his down to earth and cheeky personality. He enjoys seeing everyday Australians turn their dreams of saving for a goal or getting into a home a reality. 

      Growing up in Goulburn, NSW, Raymond was brought up with good old-fashioned Aussie values of hard work and a fair go. It soon became apparent that Raymond wasn't content for the conventional path of grazing, producing the very best wool, and finding a nice sheep to settle down with. So it wasn't long before his passion for performing and his talent as a likeable larrikin shone through - landing him a few roles such as 'RAMlet'. He was even tipped to play RAM-bo at one point but chose to become star of the small screen instead as RAMbassador for RAMS. He now finds this role so much more rewarding.

      Contact your local RAMS Home Loan Centre about your home loan options.

      Raymond A Ram
     

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  • Disclaimer:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.

    The views and opinions expressed in this article are those of the author alone and do not necessarily represent the views or opinions of RAMS Financial Group Pty Ltd ABN 30 105 207 538 (RAMS),  Westpac Banking Corporation ABN 33 007 457 141 (Westpac) or their related bodies corporate. This article is strictly for information purposes only and neither RAMS, Westpac nor any of their related bodies corporate make any representation as to the accuracy or completeness of the information in this article or endorse the views expressed in it.