When it comes to buying property, there will always be additional costs – and most of the time, these costs will go way beyond what you have to pay for the deposit. You will have to deal with lender’s fees, legal fees, building inspection fees – but what will most likely burn a great whole through your budget is the stamp duty fee.
To make things even more complicated, stamp duty has no standard rate in Australia. In fact, each state will feature its own rate – and this might leave you confused about what it is exactly and how much you will have to pay. To make things easier for you to understand, this article will present you the basics of stamp duty.
Stamp duty is practically a tax that pays for the property transfer (e.g. homes or lands) from one lender to another. They also apply to other types of properties such as mortgages and vehicles – as well as any other belonging that has your name on the contract.
When it comes to property, the value of the property will be the main deciding factor into how much you will have to pay. Moreover, the state in which you are making the purchase will also have its own role – which is why it is recommended that you make use of a stamp duty calculator.
However, as a general rule, the higher the price of the property, the more you will have to pay in stamp duty. Sometimes, this may add up to thousands of dollars.
This will differ from one state of Australia to another. For instance, in the ACT, you must pay the stamp duty within 28 days of settling, whereas in Tasmania and NSW you will have up to 3 months to make that payment. However, as a general rule of thumb, it is payable prior to settlement. Contact a conveyancer or your mortgage broker for more information.
As you might have noticed, stamp duty differs depending on the place where you made the purchase. Three factors, in particular, will determine exactly how much stamp duty will cost.
Location: Stamp duty price is generally set as a percentage from the full price of the property – but this will also depend on the location where the property was built.
Property Type: Each property type will have a different value in stamp duty. For example, you will have to pay a different price for an existing residential loan compared to a vacant land.
Purpose: Do you want to rent the property straight away, or is your intention to live in it? In this case, the stamp duty might also differ.
Grants: Depending on what state, grants are available to first home buyers with no stamp duty payable up to certain values with discounts applied thereafter. Get in touch with our mortgage and finance brokers who will fill you in with what grant you may be eligible for.
If you need help calculating your stamp duty, contact our office right away. Moreover, if you are in need of help to finance the stamp duty, we may be able to help you out. We have many years of experience in helping our clients find an appropriate loan for their needs, and we would be more than happy to guide you through the process.
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