Stamp duty is a tax that all Australian territories and states impose on property purchases. The actual amount payable is based on the purchase price, location of the property (the rate varies from state to state) and the purpose of the loan (some states charge different rates on investment properties than on properties bought for residence).
In the same way that the rate varies from state to state – so does the timeframe in which it needs to be paid – ranging from 28 days to 2 months from the date of settlement. If you don’t pay within the required timeframe, you will be liable for additional penalty rates and interest.
In real estate, the buyer pays the stamp duty. What is the money used for, you may ask? Well, as with other taxes, it is added to the state government budgets and used to provide services such as health, transport and roads, police, justice and emergency services.
In certain instances, such as for first time home buyers and pensioners, or transfer of ownership following a death or divorce, a concession or exemption from stamp duty may be available, subject to certain pre-conditions that must be met. For first time home buyers. These pre-conditions could relate to the value of the property, the type of property and whether the home is the first home or not.
Depending on the value of the property, the stamp duty can add a significant amount to the price of your property – so it is really important to take this into account when considering the affordability of your new home, and avoid a nasty surprise when it’s time to pay.
Contact the team at YNM Real Estate for information specific to the area in which you are considering a property purchase.
