Stamp Duty Basics Explained
Stamp duty is a transactional tax levied by individual states through the Office of State Revenue, with each state or territory setting their own stamp duty rates. You will generally be responsible for paying stamp duty when you purchase a home or other property.
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June 2008
Why Stamp Duty Exists
Stamp duty is technically a tax on the document of transfer (the title transfer), and not on the property itself. Stamp duties are collected to fund certain state programs, such as education, healthcare, or public safety and law enforcement programs.
Stamp Duty and Home Purchases
When you purchase a home, or property where you intend to build your home, your stamp duty obligation can significantly increase the total purchase price of the property. The stamp duty rate varies between each state, but generally is calculated in relation to the purchase price, from strictly a percentage of the dutiable value to a combination of a percentage and a flat stamp duty fee. Stamp duty can add hundreds to tens of thousands of dollars to the price of your new home.
First-Time Home Buyers and Stamp Duty Concessions
First-time home buyers may be able to catch a break. Aside from being eligible for the $7000 first home buyer’s grant sponsored by the federal government, state governments may have grants or programs available to help offset the cost of stamp duty for first-time buyers or those meeting other requirements.
For example, property buyers in the Northern Territory have a few stamp duty concessions available to them. First-time home buyers there are eligible for a concession covering the duty on the first $385,000 of the property’s purchase price, which amounts to up to $15,515.50 off of the duty owed. This concession is available to those purchasing their first home or property to build a new home from May 6, 2008 onward. Those Territorians purchasing a home that isn’t their first home, but which will be their primary place of residence, are eligible for a “Principle Place of Residence Rebate” instead, that entitles them to save up to $2500 on the stamp duty owed on the purchase.
To find out how much stamp duty you will owe on your home or land purchase (or concessions available to you), you will need to know the purchase price before contacting or visiting the website for your state or territory’s Office of Revenue.
Article correct at its author date: June 2008. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.
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