From buying a car to purchasing a property, stamp duty feels like it’s everywhere! Stamp duty is basically a tax on certain transactions, the amount you pay depends on the value and the type of the transaction.
(‘Fun’ fact – the idea of stamp duty is believed to have first appeared in Venice in 1604)
Today, we are going to discuss stamp duty you pay when buying a property.
Back in the 1980s, if you were buying a median-priced house and earning the average income after taxes; in a capital city (like Melbourne or Brisbane), it would take you about a month’s worth of salary to pay for stamp duty. Fast forward to now, it takes about four months in Brisbane, five in Adelaide, six months in Melbourne and Sydney.
Needless to say, stamp duty is a hefty cost to consider when you are buying a property.
Who pays for stamp duty?
The purchaser pays for stamp duty, not the seller.
How much do I have to pay?
It depends…The rule of thumb – the more expensive the property, the higher the stamp duty. Other factors that affect the amount paid:
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- The state the property is in – the duty is different in each state
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- Your (household) income
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- Type of property. e.g. vacant land has less stamp duty than an established property
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- If you are a first home buyer
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- Whether it’s an investment property or a place you will live in. e.g. certain states have higher stamp duty for investors
Most banks offer a calculator to help, such as this one from CBA. https://www.commbank.com.au/digital/home-buying/calculator/stamp-duty-calculator
When do I have to pay it?
Just like the duty, each state and territory have its own rules. For example, in Queensland and Victoria, you have to pay within 30 days of buying the property. In New South Wales and Tasmania, it’s within 3 months
Why is it so expensive?
Well…. Property prices have increased much faster than most people’s incomes. Plus, the government haven’t adjusted the stamp duty brackets to keep up. Although there are currently proposals by the Victoria and New South Wales state governments to get rid of stamp duty to help people to get on the property ladder.
Do I have to pay?
Generally, yes. There are exemptions and concessions available,
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- If you are a healthcare card holder,
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- If you are an indigenous Australian
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- If you are a pensioner
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- If you are a first-time home buyer
It’s best to check requirements in your state to make sure you meet the eligibility criteria.
Interested in buying a property? Check out our free property buying calculator: https://shecanfinance.com/resources/