Do I need to pay Stamp Duty when I buy a House or Unit?
One of the first questions a purchaser of a unit or house will often ask is whether they need to pay Stamp Duty. Unfortunately, many home buyers do not factor in this cost when they are purchasing a property and are shocked by the amount they are liable to pay relative to the overall purchase price. A small concession is that the revenue generated from Stamp Duty is added to all State Governments’ respective Budgets. The moneys are used for such services as Health, Transport, Roads, Education, Environment, Climate Change and Water.
However, in New South Wales there are some concessions. First, on vacant land purchased for up to $350,000, the respective Stamp Duty will be zero. This represents a saving of $11,240. This saving will reduce by $10.98 for every $100 exceeding this limit, with the Stamp Duty savings being eliminated if you pay more than $450,000 for vacant land.
Second, first home buyers can apply for an exemption to Stamp Duty on an established home to the value of $550,000. This represents a saving of $20,240. That concession will however reduce by $22.49 for every additional $100 paid for the property. Such savings cut out completely on existing homes valued up to $650,000. To be eligible, the purchaser/s must have never previously owned residential property; the purchaser/s must not have a spouse that had previously owned property or received the exemption; the purchase must be for the whole of the property; the purchaser/s must be over the age of 18; at least one of the purchasers must be an Australian Citizen or Permanent Resident; and one of the purchasers must live in the property for at least 6 continuous months, with that period starting within the first 12 months of the property settling. From 1 January 2012, additional restrictions were introduced, to the tune of Stamp Duty concession only applying to new homes, substantially renovated homes or vacant land.
For more information, contact Zena Dabboussy-Bardouh of ZDB Legal Services Pty Ltd on 9758 8133, 0414 305 076 or zena@zdblegal.com.au. Or take a look at the following Stamp Duty Calculator, http://www.stampdutycalculator.com.au/.