| What is Stamp Duty
Stamp duty is a significant upfront cost when purchasing property and varies in each state or territory and with the value of the property. To determine how much you can afford to spend on a property purchase, it’s important to understand how stamp duty applies to your property purchase.
Stamp duty, also known as “land transfer duty,” is a government tax on certain transactions that you normally need to pay when you buy real estate. However, there are various concessions and exemptions that may apply based on your individual circumstances. For example, if you’re a first home buyer eligible for your specific state-based “First Home Owners Grant,” on a pension, or run a farm.
The conveyancer or solicitor you use for conveyancing will calculate exactly what is payable and can arrange to pay stamp duty on your behalf.
The amount of stamp duty you need to pay varies depending on several factors, including the state or territory, the purchase price, whether the property is a primary residence or an investment property, whether you’re a first home buyer, whether you’re purchasing an established home, new home, or vacant land, whether you’re purchasing a farm, and whether you’re classified as a foreign purchaser.
Normally, you need to pay the stamp duty within 30 days of settlement. Your conveyancer can organise to pay your stamp duty on your behalf. Sometimes it may be possible to defer your stamp duty payment or to apply for a concession or reduction.
It’s important to note that stamp duty is an upfront cost that cannot be covered by your home loan. Therefore, it’s crucial to check with your state’s regulatory office (visit ato.gov.au) to gain the most up-to-date regulations for where you live.
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