Stamp duty is a charge which is applied by state governments in Australia on transactions relating to the transfer of land or property. It is paid upfront and needs to be budgeted for in addition to your costs for obtaining a mortgage.
The amount of stamp duty you are required to pay differs in each state, however there are three factors, along with the value of the property, that determine how much stamp duty you will pay. Contributing factors include:
whether or not the property is a primary residence or investment property;
whether or not you are a first home buyer; and
if you are purchasing an established home, a new home or vacant land.
This website contains an up-to-date stamp duty calculator for all states that accounts for the above three factors ensuring an accurate stamp duty figure. Factoring in this additional cost cannot be overlooked when you are considering your capacity to repay a loan.
However, in a bid by state governments to increase home ownership and growth, there are a range of tax concessions available to reduce stamp duty. The exact amounts differ across each state, but those who benefit the most are first home buyers and those opting to buy a newly constructed house, townhouse or unit.
In NSW, first time buyers who purchase a new or established home up to $650,000 will pay no stamp duty. A scaled concessional stamp duty will apply to purchases between $650,001 and $800,000.
For vacant land, first time buyers will pay no stamp duty on purchases up to $350,000 and concessional duty on land valued between $350,001 and $450,000.
First time buyers are eligible for a $10,000 first home owners grant (FHOG) for the purchase of a newly built home, townhouse or unit and also for the construction of a new home. The FHOG is not released until settlement, with the exception of construction where it is released after the first progress payment.
Please note that in all of the above cases you need to have never owned property in Australia before, otherwise these concessions will not apply to your circumstances.
Do you need advice? Call Chris today on 0490 075 039 or send an email to firstname.lastname@example.org