The first step toward homeownership is exhilarating, but it may also be intimidating. There are many unknowns and it’s a new learning curve. One such thing is stamp duty. We will try to break down and simplify stamp duty for you whether you are a first home buyer or not.
What Is Stamp Duty?
You’ve definitely heard about stamp duty, also known as transfer duty if you’re planning to buy a home. But what exactly is it, and how does it affect you in terms of your loan rate?
Simply put, stamp duty is a tax that we must pay when we purchase a home. The actual amount is determined by your state or territory, the price of the property you’re buying, and any applicable exemptions. Stamp duty costs Australians tens of thousands of dollars on average. This is in addition to the mortgage, deposit, and other costs associated with purchasing a home. How can a buyer expect to get the cheapest loan rate.
The Australian government levies stamp duty on a range of purchases. The most important aspect of that umbrella is property. However, stamp duty may apply to some gifts and insurance policies in Australia. In the case of real estate, the amount of stamp duty you’ll have to pay is determined by the property’s worth. Of course, each state has its unique set of rates. Things may get more difficult as a result of this. However, you should be able to utilize a stamp duty calculator to help you. However, the higher the property’s value, the higher the stamp duty you’ll have to pay. It might be jarring for first-time buyers and investors.
What Determines The Actual Cost Of Stamp Duty?
Stamp Duty is generally determined by two factors:
- The state or territory you live in
- The purchasing cost of your house.
What is the Time Frame on Stamp Duty Payment
Queensland- Within three months of signing a contract for sale or transfer in New South Wales.
Within 30 days of settlement in Queensland.
VIC – within 30 days of your new purchase’s settlement.
ACT – within 14 days of obtaining a Notice of Assessment and following settlement.
TAS – within three months following the property’s transfer
NT – no later than 60 days after the settlement
SA – at the point of agreement
WA – one month following the issuance of a duties assessment notice.
Exemptions from stamp duty
Stamp duty will be charged on all land transfers and property sales, although you may be eligible for various exemptions and reductions.
Purchasers of their first home
Property value is low.
Estates of the deceased
Purchase made outside of the plan
Tips on how to save money on stamp duty
Purchase a less expensive property. When a property’s worth exceeds $500,000.00, first home buyer stamp duty in most states rises dramatically. To save even more money, it might be worth looking for a property below this price range.
Consider purchasing a home beyond state lines. Take a look interstate if the state you want to buy in has high stamp duty fees. Other state governments may charge much lower stamp duty rates. It may be more difficult to relocate to another state, but if you are purchasing an investment property, this strategy may be effective.
Reduce the cost of construction. If you buy a house and land bundle, the higher the value of the property, the higher the stamp duty you’ll have to pay.
Housing affordability over the long term is a highly challenging and complicated issue. Buyers look for many concessions and also the cheapest home loan rate available on the market. You must look for something that will provide a material sustained improvement over the long term.