Stamp duty and buying a property

Stamp duty (now known as Transfer Duty) is a form of tax payable, to the relevant State Government, on the purchase of land.

Transfer duty starts off with a basic formula applied to the purchase price of the property or land being purchased. This is the normal rate a Buyer would pay.

From the basic formula, depending on the circumstances of the Buyer, certain concessions and or exemptions may apply, or worse… additional duties may be added.

Someone buying a property to live in as their primary place of residence may receive the Home Concession which is a reduced amount of Transfer duty. The home concession rate applies to the first $350,000.00 of the purchase price and for any amount above that the general transfer duty rates apply to the balance. A Buyer can save up to $7,175.00 by claiming the home concession.

Someone buying a property for the first time anywhere in Australia (and have not owned property anywhere else in the world before) may receive the First Home Concession which is a further concession on top of the Home Concession which may ultimately negate the Transfer duty for the Buyer in total. This concession only applies to a home valued under $550,000.00 and can save a Buyer $15,925.00.

Someone buying vacant land to build their first home on may receive the First Home Vacant Land Concession. The first home vacant land concession only applies to vacant land valued under $400,000.00 and can save a Buyer $7,175.00 in Transfer duty.

Other criteria exist and needs to be met in order to qualify for the concessions. Talk to your conveyancing lawyer to find out if you do qualify for any of these concessions.

There are some additional duties payable by people who are not residents of Australia. This duty is called Additional Foreign Acquirer Duty (in short AFAD) which is basically an amount of 7% of the purchase price being added to the usual Transfer duty amount mentioned above. In addition to AFAD the foreign Buyer (of residential properties) will also need to go through the Foreign Investment Review Board (FIRB) approval process. A minimum application fee of $5,800.00 is payable.

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