All you need to know about Stamp Duty
So you’ve heard of stamp duty, but are none-the-wiser as to where it all goes and what it amounts to… then you’ve come to the right place!
As part of making the buying process simple, we want to make sure you’ve got all the facts to make your life easy. If you are prepared for ‘additional fees’ and ‘hidden costs’ then you can include them in your budget from the start, making them far less daunting. So let’s start with stamp duty.
Who does it apply to?
Stamp duty is a form of tax – it varies from state to state across Australia, and is unavoidable when it comes to buying property. So don’t try and run from it, just make sure you’re ready for it.
This form of tax is imposed on certain purchases, with real estate being one of the key areas. It can also apply to certain home loads, insurance and gifts.
So whether you’re local, or buying in WA from interstate, the stamp duty tax is still applicable.
When will your bank account take the hit?
Stamp duty must be paid within 30 days of the property settlement, so make sure to set this aside when working out your budget.
Remember: The more expensive a property, the higher stamp duty rate charged.
Where does your hard earned dollar go?
Your stamp duty tax gets put back into the Western Australian economy and gets added into the government budget. It is most commonly put to use in areas such as health, transport, roads, police, justice and emergency services.
How much should I expect to pay?
The actual amount is decided by separate state and territory governments, rather than the Federal Government, therefore, rates are varied. Each state has a different approach, so make sure you stick to the WA facts, oppose to generalised.
You can take a look at the WA government calculator online by following this link for an exact amount.
What info you need to have ready
To work out how much your stamp duty will be, you’ll be asked a number of questions. Make sure you have the answers upfront to get a better understanding of fees.
- Property type: You’ll need to state whether you are buying predominantly as a residential home or investment property.
- Property location: Which suburb you are planning on buying in.
- Whether you’re a first home buyer: sometimes concessions for first-time buyers, so make sure you have checked whether you qualify for these terms, as it could save you a lot in the long-run.
- Purchase type: Have you chosen an established home, a new home or vacant land to build on?
What affects the cost?
The location of your property can be a key element as to deciding how much tax you’ll have to pay, as well as the value of the property. The government usually has a tiered structure in place, that takes all of these elements into consideration.
Exemptions – do you qualify?
This is a rare case, and often only under extreme circumstances, such as death of a property owner or joint tenant, and a few other specific situations – if you believe you are legible, it’s best to contact your local government.
State rules and regulations
Each state has its own levy and calculates stamp duty differently. Not all states offer the same first-home buyer benefits, so make sure you are on top of the discounts and inclusions you qualify for in WA.
Be in the know
So before you begin searching for your new home, make sure you’re aware of all the finances involved. If your budget is strict, you don’t want any nasty surprises and add-ons, including stamp duty. So now when you are working out how much you have to spend, you have all the facts and figures to go on.
Keep on top of everything
Just be aware that stamp duty fees can change, so make sure you check back regularly.
Stamp duty is just one government fee, so make sure you read up on all of the charges added onto buying property.