it is important to be aware of what concessions are available if you are considering buying a property, particularly if you are a first home buyer.
Not sure about your obligations when it comes to stamp duty? Check out our in-depth guide on who pays stamp duty to get all the details you need.
What is stamp duty?
Stamp duty is one major – but inescapable – cost you need to be aware of and factor into your budget when buying a property.
This tax is collected by state and territory governments and each state has its own methods of calculating stamp duty. This means what you’d pay for a similar property in different states could be completely different.
Furthermore stamp duty can vary depending on whether it’s an established or new home, if you’re a first home buyer, an owner occupier or an investor.
The purchase price of the property can also be a factor in the amount of stamp duty paid. As you can see, it’s not a one size fits all measure and can therefore be confusing for home buyers.
Stamp duty is based on either the market value of the property or the price paid; whichever is greater. Therefore, the more expensive a property is, the more stamp duty you will have to pay.
Our state by state guide to stamp duty below provides all you need to know about the latest stamp duty concessions available.
Please note that the below summary does not contain information on the various grants available for first home buyers. These also vary between states and should be researched prior to any purchase.
New South Wales
On the 1st of July 2017, the First Home New Home scheme was replaced by the First Home Buyers Assistance scheme.
Under this new scheme, first home buyers will not have to pay stamp duty for both new and existing homes for properties up to $650,000.
The duty will be reduced for amounts between $650,000 and $800,000. There is no change to the cap for vacant land.
Learn more about stamp duty exemption in NSW!
There are several stamp duty concessions for Queensland homebuyers.
A First Home Concession is available, whereby a predetermined amount (based on purchase price) is deducted from a set home concession rate.
As per the calculations, no transfer duty is payable when a first home concession is claimed for a home valued at $500,000 or less.
Furthermore, the duty is reduced for properties up to the value of $549,999.99. For any property above this price there are no concessions.
There is also the First Home Vacant Land concession. For vacant land under the value of $250,000 there is no duty payable.
Tiered concessions are available up the value of $399,999.99. There is no concession for land over the value of $400,000.
Sharpen Your Understanding: Don’t let hidden costs catch you off guard. Equip yourself with knowledge by reading about stamp duty in NSW before your next property venture.
Stamp duty (land transfer duty) for first-home buyers purchasing a home to the value of $600,000 has been abolished for contracts entered into from the 1st of July 2017.
Furthermore, duty will be phased-in for eligible first-home buyers who purchase a home with a dutiable value between $600,001 and $750,000.
When a home buyer is eligible for the First Home Owner Grant in Western Australia, a concessional rate of transfer duty will apply if the value of the dutiable property is below certain thresholds.
The First Home Owner Rate of Duty applies to transactions with a dutiable value of up to $530,000 for a house and land, or $400,000 for vacant land.
Australian Capital Territory
The Home Buyer Concession Scheme (HBCS) is an ACT Government initiative that assists homebuyers of residential homes or vacant property by charging duty at a concessional rate.
The concession applies to the purchase of a new home or a block of vacant residential land where the transaction date occurs between the 7th of June 2017 and the 31st of December 2017.
The HBCS applies at different levels depending on the transaction date as well as the purchase price of the property.
It should be noted that substantially renovated homes are no longer eligible for the HBCS; this applies only to new homes (those which have not previously been occupied or sold as a place of residence) and vacant land (land without a home or dwelling built on it).
There are a few different thresholds which will determine the amount of duty paid. For new homes to the dutiable value of $470,000 or less there is a $20 minimum duty.
For new homes with a value more than $470,000 but less than $607,000, a concessional duty of $13.05 for each $100 over the $470,000 value is payable. For homes over $607,000 there is no concession available.
For vacant land to the dutiable value of $281,200 or less, there is a $20 minimum concessional duty payable.
For vacant land to the value of more than $281,200 but less than $329,500, a concessional duty of $13.05 for each $100 over the value of $281,000 is payable. No duty concessions are available for vacant land with a dutiable value of more than $329.500.
From the 1st of September 2016, the Northern Territory Government introduced increased stamp duty assistance for first home buyers who purchase an established home in the Northern Territory up to the value of $650,000.
The First Home Owner Discount (FHOD) is a full stamp duty concession on the initial $500,000 value of a home, which equates to stamp duty savings of up to $23, 928.60.
First home buyers that are building or acquiring a new home are not entitled to the FHOD, however may be eligible for the FHOG.
Those who are not entitled to the FHOD or FHOG may be eligible for the stamp duty Principal Place of Residence Rebate or the Senior, Pensioner and Carer Concession, so it’s always recommended to review these concessions and their eligibility criteria carefully.
In South Australia there is one main stamp duty concession available.
The off-the-plan apartment concession offers a partial concession on stamp duty if the contract was entered into between the 1st of July 2014 and the 30th of June 2018.
For contracts entered into between the 20th of June 2016 and the 30th of June 2018 (inclusive), the concession applies to purchases of off-the-plan apartments located anywhere in South Australia.
Foreign purchasers who enter into a contract on or after the 22nd of June 2017 are not eligible for this concession.
In addition, if you are a foreign purchaser and you acquire residential property in South Australia, from the 1st of January 2018 you will be required to pay a stamp duty surcharge.
Stamp duty on transfers of non-residential, non-primary production land will be abolished from 1 July 2018.
Unlike in most other states and territories, first home buyers in Tasmania do not have a specific exemption or concession for stamp duty.
However, some buyers may be entitled to an exemption from land tax if the property is transferred between “partners in a marriage, significant relationship or a caring relationship”.
Pensioners are not entitled to any specific duty exemptions or concessions.
Article originally published on BMT Insider.
Bradley commenced employment with BMT Tax Depreciation in 1998, becoming a Director of the company in 2002, Managing Director in 2012 and Chief Executive Officer in 2015. As a result he has substantial knowledge about property investment and specialist experience in tax depreciation and construction cost consulting.
Bradley is actively involved in educating property investors and property related organisations about the importance of tax depreciation. He is a regular keynote speaker and presenter covering property depreciation services on television, radio, at conferences and exhibitions Australia-wide. Some of these include property expos, Defence Force Housing Australia, Taxation institute of Australia, National Tax & Accountants Association, Real Estate Institute of Australia and regular training events for national corporate real estate groups.
Bradley holds a Bachelor of Construction Management, is a member of the Australian Institute of Quantity Surveyors, the Royal Institute of Chartered Surveyors and the Auctioneers and Valuers Association of Australia.