What is Stamp Duty?
Let's be honest. How much do you know about Stamp duty? Essentially it is a government tax applied to the transaction of property, mortgages, and vehicles. When it comes to residential property, stamp duty covers the change of title and ownership of the property and the buyer pays stamp duty.
The extra revenue then goes into the government budget and is used to cover things like public transport, health and waste management.
How Much Do I Have To Pay?
Although stamp duty is a government tax, it is enforced by the state government which is why each state and territory has different stamp duty rates and regulations.
The rate on stamp duty is dependent upon various factors, like home buyer benefits and concessions. Generally, the more expensive the property, the higher the stamp duty, which is usually payable within thirty days of settlement, but this again will vary depending on the state or territory your property is located within. Thankfully, there are online stamp duty calculators to help you work that out. A simple Google search will find them for you.
How Does Stamp Duty Differ From State To State?
WA - Payable within 2 months of settlement.
ACT - Payable within 28 days of settlement.
VIC - Payable within 30 days of the property being transferred/ the date of settlement.
NSW - Payable within 3 months of settlement. Unlike other states, if the property purchase is 'off the plan,' then buyers must pay duty within 3 months of the agreement.
NT - Payable 60 days of entering into the transaction or at settlement, depending on which date occurs earliest.
QLD - Payable within 30 days of settlement.
SA - Payable on settlement day.
TAS - Payable within 30 days of the property being transferred/ the date of settlement.
Are There Any Discounts Or Exemptions?
Yes! First home buyers in WA, are eligible for a discount on their stamp duty! If you qualify for the First Home Owner's Grant, you will only have to pay a concessional rate of transfer duty, this, however, is only if the value of the property is BELOW certain thresholds, so do your research first. The First Home Owner Rate of Duty applies to an amount of up to $530,000 for a property and land or $400,000 for vacant land.
If you pay under the threshold amount for your state, or if you are currently receiving Government benefits you might also be eligible for exemption. You will need to contact your local State Revenue office for confirmation. Also, there are exemptions available for the transfer of family farms, and transfers between married couples or de facto partners of two years.
First Home Owner Grant
If you are a first home buyer and you are building a new home you are in luck! The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their legislation.
Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria.
Bear in mind that if you accept the FHOG, you will have to adhere to residency requirements and use the property for residential uses only for a set amount of time before it can be used as an investment property. Also, the can be the case with home loans for first home buyers as well so make sure you read the fine print.
As for those buying an established home you will miss out on the FHOG in most states so make sure you way up your options as the difference between buying or building could save you thousands.
First Home Owner Grant State by State
WA - First home owners building a new home may apply for a grant of up to $10,000.
ACT - As of 1 January 2017, the FHOG is $7,000. Payment of the First Home Owner Grant will end for transactions entered into after 30 June 2019.
VIC - From 1 July 2013, a $10,000 First Home Owner Grant (FHOG) is available when you buy or build your first new home.
NSW - $10,000 towards the purchase price, in addition to the First Home Buyers Assistance Scheme benefits.
NT - From 7 May 2019, the FHOG will be $10,000. However, you may also be eligible for the BuildBonus grant.
QLD - Depending on the date of your contract, you'll get $15,000 or $20,000 towards buying or building your new house, unit or townhouse (valued at less than $750,000).
SA - FHOG is a one-off grant payable to eligible first home owners to a total of $10,000.
TAS - As part of the 2018-19 State Budget, the Tasmanian Government has extended the $20 000 First Home Owner Grant for one additional year, from 1 July 2018 to 30 June 2019.
What If I Am Not Exempt?
If the unfortunate, but common circumstance arises that you will not meet eligibility requirements for stamp duty exemption or FHOG, be sure to keep this in mind when saving for your house deposit. You will need it when you come to buy your new home, especially given that most states require payment within the first thirty days. Good luck!