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There are dozens of fees and taxes that you need to pay when purchasing a home. For a first-time home buyer, these additional charges can be complicated and confusing. Each state has details on stamp duty which is helpful for first time buyers.
One of the fees that homebuyers may overlook is the stamp duty tax. This is a tax that is levied by all of the states and territories in Australia. Home buyers are required to pay this tax when buying a home, and the rates may vary depending on the state where the property is located and other details.
If you are currently searching for a home loan, you may want to calculate the stamp duty tax. You should understand the purpose of this tax, how it is calculated, and whether it is required for all home purchases.
What is the Stamp Duty Tax?
Stamp duty is merely a tax that you need to pay the state when transferring ownership of land or property. As the federal government does not levy this tax, each state in Australia sets its stamp duty scale, requiring you to specify the location of the property when calculating your estimated tax. Stamp duty and property prices have reportedly fallen in NSW according to Business Insider.
Along with the transfer of land or real estate properties, stamp duty may be applied to other transactions. Taxable transactions include insurance policies, purchase agreements, and vehicle transfers.
The stamp duty is typically due after the settlement of the property transfer. The timeframe for paying this tax depends on the state. In New South Wales, the stamp duty is typically due three months after settlement. However, in South Australia, the stamp duty is due on the settlement date.
Unlike some of the other fees that are applied when buying a home, the stamp duty cannot be rolled into your home loan. You need to pay it within the timeframe. The payments may be completed online or through a bank transfer, debit card, or credit card.
How Much Stamp Duty Do You Need to Pay?
Before applying for a loan, you can estimate your stamp duty payment by using a free online Stamp Duty Calculator. You will need to input several details, including the type of property you plan to purchase, the state where the property is located, the value of the property, and the amount that you have for a deposit.
After entering this information, you can receive your estimated stamp duty calculation. Along with this estimate, you can find additional online tools, calculators, and resources to learn more about the actual cost of obtaining a home loan.
When you finish exploring these details, you can use different lending services to compare home loan products and get a favourable interest rate.
Stamp Duty Exemptions and Concessions
If you are a first-time home buyer, you may qualify for an exemption or a concession that allows you to avoid paying the stamp duty tax or minimise your tax liability. The conditions for these exemptions and concessions depends on where the property is located.
For example, first-time home buyers may receive a full exemption for the purchase of homes valued up to $550,000. In Victoria, first-time home buyers may receive a full exemption for homes valued up to $600,000.
Source: Lendi
