Don’t forget about stamp duty
When you’re investing in property, stamp duty often isn’t at the top of the list of priorities. First you need to plan your finances, save for a deposit, and do your research on which area you’ll purchase in. But stamp duty shouldn’t be overlooked – almost all home buyers will need to pay it, and depending on the value and location of your property, it could make a big impact on your costs. So, here’s everything you need to know about stamp duty.
What is stamp duty?
In a nutshell, it is a tax payment that applies to every home purchase across Australia. Your stamp duty payments are paid to whichever state or territory government that you’re purchasing your property in, and they’re designed to cover the costs of the legal documentation for the sale of the property. Usually, you’ll need to pay stamp duty before settlement, but occasionally it can be settled up anytime during the first few months of your home purchase.
Who pays stamp duty?
It is the responsibility of the home buyer to pay stamp duty, and the bad news is, almost everyone has to pay it. To make things a little easier, many state or territory governments offer exemptions for first home buyers, but this will depend on how much the property you’re purchasing is worth.
How much is stamp duty?
How much stamp duty you pay depends on the property that you’re buying and the state or territory you’re buying in. There are differing scales of how much stamp duty you’re required to pay depending on the value of your property – for example if you buy a property worth $500,000 in the Northern Territory, you’d be paying $24,260 stamp duty, or 4.8%. If the property is worth $800,000, you’d be paying $39,932, or 5%. If you bought the same $800,000 home in Victoria, you’d be paying $45,196 stamp duty, or 5.6%.
What else can effect stamp duty?
Other considerations when calculating stamp duty is whether you’ll be living in the property or whether you’re using it for an investment, and other features such as whether the house is brand new or an existing property. These can all impact the amount you pay, so make sure you’ve considered these factors during your planning.
Calculate your stamp duty payments
Stamp duty is often a significant payment, so you’ll need to make sure you have the money ready when the time comes. As there are so many variables in stamp duty calculations, we highly recommend using an online calculator to make sure you’ve factored everything in and that you’re getting an accurate picture of your costs. At Reventon, we’ve created just that – discover our stamp duty calculator so you can get started right away.
Looking for further advice?
If you have questions about stamp duty or any other aspect of property purchasing, our team at Reventon are ready to help. We have over 125 years of collective experience covering all elements of home buying, so you’ll be in safe hands when it comes to making the best decisions on your property investment journey. What’s more, you can get personalised advice for free – we can even come and visit you at home.