Stamp Duty and how it affects you
Before you make a large purchase, it will be important for you to be aware of the stamp duty that you may be required to pay. Stamp duty is a tax that is levied on some documents that has the effect of increasing the purchase price on many items in Australia, so this cost needs to be taken into consideration before you apply for a home loan.
Stamp duty rates vary from state to state, but they also vary from property to property within the state. This means that it’s not just important for you to be aware of the fact that you will have to pay a stamp duty; it will also benefit you to know exactly what those rates will be so that you can plan to save this amount along with your deposit.
Stamp Duty Variations
For example, in New South Wales, a house with a purchase price between $300,001 and $1 million will require that you pay a stamp duty equal to $8,990 plus 4.5 percent of the dutiable value over the amount of $300,000. To make sure that you calculate the amount of stamp duty that you are most likely to pay in your state, you may wish to take advantage of a stamp duty calculator.
To use a stamp duty calculator, you will need to enter the state in which you plan to purchase the house, the property’s purchase price and whether or not it is to be investment property or your family’s home. However, you must be aware that the stamp calculator only figures your stamp duty payment and does not figure any transfer fees or mortgage registration fees that may be required of you.
In some cases, you may be exempt from paying stamp duty, or you may be charged a lower rate if you qualify. This will depend on the type of property you are purchasing, how much the property is worth and who will be living in the home. If your property qualifies, you will be charged what is called a “concessional rate.”
If you are planning on buying a home in New South Wales and you qualify for the concessional rate, you will be exempt from stamp duty if the value of the property is less than $550,000. Home properties with purchase prices between $550,000 and $650,000 are eligible for a partial concession.
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