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First Home Buyer Stamp Duty
When buying your first home there are a lot of different costs to consider. While your focus may be on saving a sufficient deposit and finding out how much a lender will let you borrow, make sure you don’t forget about stamp duty.
Because stamp duty can be a significant upfront cost, it’s important that you factor it in to your total home-buying budget as soon as possible to avoid unnecessary financial headaches down the line.
Here’s how it’s calculated in different states and territories around Australia, and how discounts or concessions may provide stamp duty relief for first home buyers.
What is Stamp Duty?
Stamp duty (also called ‘Transfer of land’ duty in some states) is a special tax collected by a state or territory government on certain acquisitions, including a sale or transfer of land.
Generally, the amount of stamp duty you have to pay depends on the price you paid for the property or its market value (whichever is greater).
What do First Home Buyers Need to Know About Stamp Duty?
Stamp duty is calculated differently depending on the state or territory in which the property is located, regardless of where the buyer resides at the time of purchase. For example, a Queenslander buying property in Tasmania will pay the Tasmanian stamp duty rate, not the Queensland rate.
Stamp duty is generally calculated according the value of the property – the greater the cost of the property, the more you can expect to pay in tax.
- Stamp Duty in ACT. If the property price is $200,000 or less, the cost is $20 or $1.48 per $100 or part thereof, whichever is greater. If it is between $750,001 and $1 million, duty will cost $25,960 plus $6.50 per $100 or part thereof above $750,000.
- Stamp Duty in NSW. For properties bought for between $80,001 and $300,000, it’s $1,290 plus $3.50 for every $100 over $80,000. For properties of more than $300,000 but less than $1 million, it’s $8,990 plus $4.50 for every $100 over $300,000.
- Stamp Duty in NT. For properties up to $525,000, the following formula applies: Duty = (0.06571441 x V²) + 15V where V = the dutiable value ÷ 1000. If the property falls between $525,000 and $3 million, the duty is 4.95% of the amount.
- Stamp Duty in Queensland. If your home costs between $75,000 and $540,000, you’ll be liable for $1,050 plus $3.50 for each $100 or part thereof over $75,000. For a property between $540,000 and $1 million you’ll need to pay $17,325 plus $4.50 for each $100 or part thereof over $540,000.
- Stamp Duty in South Australia. For a property worth more than $100,000 but less than $200,000, it’s $2,830 plus $4 for every $100 or part thereof over $100,000. If the property price is more than $500,000, it’s $21,330 plus $5.50 for every $100 or part thereof over $500,000.
- Stamp Duty in Tasmania. For property that’s more than $75,000 but less than $200,000, you’ll need to pay $1,560 plus $3.50 for every $100 or part thereof over $75,000. If the property is in excess of $725,000, it’s $27,810 plus $4.50 for every $100 or part thereof above $725,000.
- Stamp Duty in Victoria. More than $25,001 and up to $130,000, stamp duty will set you back $350 plus 2.4% of the dutiable value over $25,000. For properties above $950,000, it’s 5.5% of the dutiable value.
- Stamp Duty in Western Australia. From $80,001 to $100,000, you’ll pay $1,520 plus $2.85 per $100 or part thereof above $80,000; greater than $500,000 and it’s $19,665 plus $5.15 per $100 or part thereof above $500,000.
It’s also important to note that you may have to pay a mortgage registration fee and separate transfer fee, which also vary by jurisdiction.
All those numbers making your head swim? Easily estimate the fees and duties on any properties you’re interested in with the iSelect Stamp Duty Calculator.
Can I pay off stamp duty with my mortgage?
You may be able to include the cost of stamp duty in your home loan – however, bear in mind that this will reduce the amount you have available to spend on your new home.
Also, don’t forget you may have to pay Lenders Mortgage Insurance (LMI) if you need to borrow more than 80% of the purchase price of the property, and that the amount you have to pay increases with your loan to value ratio. That means, people borrowing 95% of their property price may have to pay more LMI than those borrowing 85%.
So, even if you’ve saved a hefty deposit, adding stamp duty to your home loan could push you over the LMI threshold or increase the amount you have to pay.
Are first home buyers exempt from stamp duty?
Depending on the state or territory, first home buyers may be eligible for a stamp duty exemption or concession.
These may apply for:
A property valued under a particular amount.
• Vacant land.
• A new property.
• A substantially renovated property.
• Property in a certain location.
Each state and territory has different eligibility rules and discounts and may change the nature of these grants, exemptions and concessions from year to year.
A qualified mortgage broker will be able to tell you whether you are eligible for a first home buyers grant, exemption or concession, and how much you might get back.
Alternatively, you can check with your local Office of State Revenue:
- ACT Revenue Office
- NSW Office of State Revenue
- NT Department of Treasury and Finance
- Queensland Treasury
- Tasmanian Department of Treasury and Finance
- State Revenue Office Victoria
- WA Department of Finance
To find out how much stamp duty you need to pay or whether you can claim any concessions, call 13 19 20 to speak to one of our home loan brokers.