What is Stamp Duty
Stamp duty is a government tax which is payable when buying a property. The amount is calculated on the purchase price. You can calculate your stamp duty at Revenue NSW. You may also be liable for stamp duty when you have a property transferred to you without buying, such as a family transfer. There are concessions and grants available under certain circumstances and are discussed further below
What is Premium Duty
Premium Duty is something to look out for as it is not imposed on all purchases but can be a nasty surprise if you are not expecting it. Premium duty is the duty which is levied against residential property which is over $3 million dollars.
When is it payable?
Stamp duty must be paid on the day of settlement. If you have an extended settlement period, it is important to note that the duty must be paid within three months of the date of exchange of Contracts or penalty interest will be imposed. If you are buying an off-the-plan property that you will intend to occupy on settlement, you have 15 months to pay your duty. However, if the off-the-plan property is to be used for investment purposes, it is due within three months of the exchange of contracts date.
Concessions and grants available?
1. First Home Buyers Assistance Scheme
If you are a first home buyer and you are purchasing an existing home, a new home or vacant land on which you intend to build your first home, this scheme may apply to you. To qualify for a waiver or reduction of stamp duty under the scheme you must meet the following criteria:
- You must not own or have previously owned property in Australia
- Your spouse, regardless of whether they are on the contract of sale, must never have owned or co-owned any residential property in Australia or received an exemption or concession under this scheme.
- You must be an Australian citizen or permanent resident.
- You must move into the new home within 12 months of purchase and live there for at least six months.
The concession or exemption will be calculated on the price of the property. If your home is less than $650,000.00 you can receive a full exemption where you pay no stamp duty. However if it is between $650,000.00 and $800,000.00 you will receive a concession. If you are purchasing vacant land, the exemption will apply if the value of the land is $350,000.00 and concessions are available between $350,000.00 and $450,000.00.
2. First home-owner grant (new home)
In addition to the First Home Buyers Assistance Scheme, you may be eligible for a $10,000.00 grant under the First Home Owner Grant (New Home). If you are buying a new home, the purchase price must be less than $600,000.00. If you are buying vacant land, the combined house and land price must be less than $750,000.00. To qualify for the grant, you must also meet the eligibility criteria required to receive the First Home Buyers Assistance waiver or concession. In order to apply for these exemptions/concessions, your solicitor or conveyancer is required to complete forms that must be lodged with your stamp duty and will liaise with you to complete these.
For more First Home Buyers information, take a look at our Vlog on Southern Waters Legal’s YouTube channel.
Read the Part 1 blogs on buying and selling property:
Part 1 Purchasing Property: Finance and Deposits
Part 1: Selling Property: Getting your property ready to market
If you have any questions or should you need any assistance please do not hesitate to contact us at Southern Waters Legal. We offer a free 15-minute no-obligation chat if you want to chat through your circumstances.
Please note: the stamp duty rates, thresholds and grant amounts referenced in this article were correct as at 2020 and may have changed since. This article is general information only and does not constitute legal or financial advice. For current figures and how they may apply to your situation, please contact Southern Waters Legal or check the latest details via Revenue NSW.
