3 Things You Should Know About Stamp Duty
Factoring in stamp duty is very important when buying a home
Stamp Duty is Different for Everyone
Buying a property? You'll have a lot of paperwork to get through, no doubt. And you'll also unfortunately have to deal with quite a few taxes - including stamp duty, the tax you pay when purchasing new land. While this is pesky, it's something that most people have to deal with.
However, we want to try and make it as painless as possible - and fortunately for you, so do many governments! Let's go over what you should know about this tax before you move ahead and buy a home.
There are many variables that will dictate how much you have to pay on stamp duty. Your location, for starters, is a big factor, as each state government has its own way of working out the tax.
For example, using the Victorian government State Revenue Office's stamp duty calculator, buying a first home at RP Data CoreLogic's median Melbourne price means paying $37,219 in stamp duty. However, a property worth the same in New South Wales results in stamp duty of $27,102.
Your rate of duty depends on how much the property or land costs, and whether you're buying a home for the first time and taking out a grant. Even the date of settlement must be entered when you work out stamp duty. You'll have to do some research to determine exactly what you'll be paying.
There's Relief At Hand
To dampen the damage that stamp duty can cause to your bottom line, there are many grants available for first home buyers in Australia. Like the tax, these all come in at different amounts depending on your state of residence, and whether you are buying an established home or constructing a new one. Generally, grants are bigger for new homes, as part of a push to get home building on the up.
There are Call for it to be Cut
That's right - some of the major voices in the housing market have called for stamp duty to be cancelled, as it presents such a significant barrier between buyers and home ownership. This includes the Housing Industry Association (HIA), which releases its Stamp Duty watch publication regularly, keeping tabs on how much it is costing Australians.
Shane Garrett from the HIA says stamp duty holds back new building - so if more voices join on, perhaps it won't even be an issue in the future. But for now, it's important to know as much as you can about it.