Stamp Duty in Australia – What is it?
Stamp Duty in Australia is an upfront, mandatory tax, charged by the state or territory governments to people who have purchased a property. So when you buy a home and ownership transfers to you, you generally have to pay a transfer duty or stamp duty.
Who is Stamp Duty paid to?
Stamp duty is paid directly to the revenue office of the state or territory in which you purchased the property.
When is Stamp Duty payable?
Payment of stamp duty depends on which state or territory the property was purchased:
Stamp duty NSW is payable no later than three months after settlement of the property.
Stamp duty in Queensland is payable in 30 days.
Stamp duty in South Australia needs to be paid on or before the settlement day.
Stamp duty in Victoria stamp duty payment is required at least 30 days before settlement.
With stamp duty in Western Australia, documents for assessment of stamp duty must be lodged within two months of purchasing or transferring the property. After those documents are lodged, stamp duty must be paid within one month.
How is Stamp Duty paid?
In NSW the NSW Office of State Revenue accepts payment via BPAY, Electronic Funds Transfer (ETF), mail, advance payment or in person.
How is Stamp Duty calculated?
The amount of stamp duty payable depends on in which state or territory you purchased your property.
Each state has its own sliding scale and different manner of calculating stamp duty. They have what is called a value category or sliding scale and will slot your property into its value category. So if you purchased your property for $360,000 they will slide that value into their value category marked $250,000 to $375,000. This will give them a lump sum to which they add an extra amount for every $100 over the lower end of the scale (in this case $250,000).
Thus stamp duty is dependent on the price you paid for your property (its dutiable value) or its market value when you purchased the property.
Stamp duty is payable subject to some varying calculations: the value of the property (as discussed above) and whether it is your primary place of residence or investment property.
Stamp Duty Calculator NSW
Note: From 1st July 2019, stamp duty calculation brackets are now indexed against inflation. Check that you and your advisors have up to date figures.
The more expensive your property the more stamp duty you will have to pay. Foreign citizens and temporary residents are required to pay an 8% stamp duty surcharge.
Calculate your stamp duty rates NSW in seconds with this calculator below:
Link to Investn Stamp Duty Calc
Stamp Duty Calculator Queensland (QLD)
As discussed, stamp duty depends on the kind of property you are purchasing: a newly built dwelling, an existing home or vacant land. QLD stamp duty also includes an Additional Foreign Acquirer Duty (AFAD) which is a duty surcharge on the foreign acquisition of residential property (7% from 1st July 2018).
Calculate your stamp duty rates, QLD, in seconds with this calculator
Stamp Duty Exemptions and Concessions NSW
If the new owner has acquired the property as a result of a family member passing away or following a divorce, no stamp duty is payable.
Stamp Duty, first time home buyers: under the first homeowners’ grants and schemes, first time home purchasers are exempt from stamp duty up to a certain amount: from the 1st July 2017, no stamp duty is required for first-time homeowners purchasing a home up to $650,000 in value. Homes costing between $650,000 and $800,000 can receive a discount.
Pensioners, carers and farmers are entitled to concessions, depending on the state or territory.
Investment properties impact stamp duty differently to the purchase of a primary place of residence. (See below).
Stamp duty on a house off the plan and on land value also differs from stamp duty calculated on the sale of an existing house. (See below).
If a home is purchased off the plan, and you intend to live in the home, stamp duty payment can be paid up to 15 months after exchange.
Stamp Duty on Investment Property
Both investors and home buyers have to pay stamp duty but if the new property is not your primary place of residence, the stamp duty will be higher. There is a concession available for properties bought off the plan – the property’s value is calculated on the land value and is therefore reduced. Thus the duty payable is lower.
Stamp Duty on Land NSW
Land tax is levied on owners of land in NSW as of midnight on 31 December of each year. You can get an estimate of how much land tax you will have to pay online on the NSW Government website under service.nsw.gov.au.
First time home buyers: no stamp duty is payable if the land value is $350,000 or less. Land valued between $350,000 and $450,000 is entitled to some concessions.
Foreign citizens and visa holders pay a 2% land tax surcharge on property purchased in NSW.
A Final Word on Stamp Duty in Australia
The Real Estate Institute of NSW lobbies vigorously for the State Government to review stamp duty. Lobbying has become more intensive as they plead with the NSW government to cut land tax. Unfortunately, you cannot claim it as a tax deduction. However, you can put the money you paid for stamp duty towards lowering your capital gains tax liability when it comes time to sell your property.
To take the stress out of paying stamp duty and calculating the best options for you, a conveyancer, solicitor or qualified mortgage broker is essential. Know what stamp duty you will have to pay early, to help you with your budget.
This is where Investn can help. We have access to qualified, knowledgeable and experienced professionals who can clarify the issues and alleviate the stress.