There are stamp duty exemptions and reduced rates for first home buyers across most states in Australia.
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.
There are stamp duty exemptions and reduced rates for first home buyers across most states. Picture: realestate.com.au/buy
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.
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.”
Here are some of the key points you need to know about stamp duty concessions as a first home buyer in your local state.
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).
Stamp duty concession for first home buyers who buy a home valued less than $550,000 or land valued less than $400,000.
Stamp duty concession for first home buyers (known as First Home Owner Discount) who buy an established home valued at up to $650,000.
No concessions or exemptions from stamp duty for first home buyers.
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.
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