If you’re buying a new property, how much stamp duty should you expect to pay? When working out the costs of purchasing a property, many buyers forget to include what stamp duty will actually set them back. To make sure you’ve got a handle on your financial situation, it’s essential that you know how much it’s going to cost you.
In this article, we’re going to take a look at how you can work out your stamp duty costs, as well as the concessions that’ll reduce how much you have to pay.
How much stamp duty will you need to pay?
The amount of stamp duty that you’ll be required to pay largely depends on which state of Australia you’re buying in.
For example, if you buy property in New South Wales, you’re going to incur far lower stamp duty costs than if you bought a similar property in a state like Victoria. You could literally look just across a state line and save yourself thousands of dollars in stamp duty costs. If you’re stretching your budget to move up the property ladder faster, this could make all the difference.
You should also look out for how each state distributes its stamp duty charges. For example, Queensland’s base stamp duty charges might seem lower than others, but you’ll end up paying over 4x more. Be careful not to be caught out by this.
For people in South Australia, however, stamp duty is going to hit the hardest. For a home that’s valued at $500,000, you’re going to be looking at over $20,000 of government fees, a large proportion of which is going to be stamp duty.
Throw the deposit into this consideration and suddenly you’re looking at over $100,000 before the bricks and mortar are even part of it.
Are there any concessions available?
As you’ve probably noticed, stamp duty can really be a crux on your ability to buy a home. There are, however, a few ways to significantly reduce – or even eliminate – stamp duty, although it depends on where in Australia you are.
For example, The Northern Territory is lenient on first-time buyers, granting them a full concession that could take near to $24,000 off of the total property costs. Although rules might change slightly, other states also offer similar concessions for those looking to get on the property ladder.
Additionally, other states have extra concessions to encourage people to build their own homes, as opposed to buy one pre-constructed. If you’ve got time on your side and want a home built to your exact specifications, this might be worth looking into.
Stamp duty is an inconvenient truth that the Australian property market has to face at the moment. By staying on the right side of concessions and buying in the right areas, however you can significantly cut down on the amount you have to pay.