What you need to know about stamp duty
Stamp duty! It’s something most home buyers roll their eyes about because we know it’s something we have to pay, but what is it really?
Stamp duty is basically a tax that every property purchaser has to pay when they buy. The percentage is different in every state but unfortunately; it’s a payment you can’t avoid.
Stamp duty can be applied to a whole range of things including loans, some insurance and even gifts. The amount you have to pay is based on a percentage depending on the state you buy in, but essentially the more expensive the property, the more you have to pay in stamps.
Those entering the property market for the first time can get caught up in the excitement of the Australian Dream, but ensure you budget for your stamp duty to save a lot of stress in the long run.
When do I pay my stamp duty?
If it is in relation to real estate, your stamp duty must be paid within 30 days of the settlement of your property which is why we recommend ensuring you do all your numbers while budgeting to take into consideration added costs to the purchase price.
What is this money used for?
Like any tax, the money gets put back into the economy by the state you purchased in. This pool of money is added to budgets for things like infrastructure, roads, health emergency services and transport.
How do I calculate my stamp duty?
As each state is different, we recommend using the online calculators available specifically to the state you are buy in. These calculators will take into consideration the state you are buying in, whether you are buying your first home or an investment and if you are a foreign buyer. For buying in Victoria, try the State Revenue Office Victoria site.
Should l buy off the plan to save stamp duty?
We hear of so many people making their decision to buy an off-the-plan property to obtain stamp duty savings. If buying off the plan, a first home buyer (under $750,000) you could be eligible for deductions, however we advise you to be very careful this is not your sole decision for buying. With so many conditions in the contracts and many off the plan properties not increasing in capital growth, you need to do your research. You may save a bit upfront, but it could you a lot when you go to sell.
Need help navigating all the information and advice you have been given? Let us help you buy your dream home or investment property without all the stress. Speak to one of our award winning buyer’s agents to help you on your property journey.
This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.