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Stamp Duty: What is it? How is it calculated

If you’re looking for a home, chances are you have of stamp duty. To understand what the cost of stamp duty will be to you, it is important to first understand what it is, what its purpose is, and the way it is calculated.


If you're looking for a home, chances are you have of stamp duty. To understand what the cost of stamp duty will be to you, it is important to first understand what it is, what its purpose is, and the way it is calculated.  Once you know the basics of stamp duty, you can properly plan for the full costs of buying a home.

What is stamp duty?

Stamp duty is a tax that is associated with some of the legal paperwork and documents that are required to be filed after a property is sold.  The government requires that the tax be collected to cover the administrative fees of transferring the title.  You won't be able to take ownership of the property until you've paid the stamp duty, so it is important to factor the cost of the tax into your budget.

How much will I pay?

The exact amount that you'll pay depends on the location of the property.  Each state has its own stamp duty tax, and there are two different ways that this tax can be calculated.

A flat stamp tax means that everyone pays the same amount.  It's also possible for the stamp tax to be calculated based on the value of the home.  Many states apply different rates based on the value of the home.  Cheaper homes will be subject to a lower tax to make the rate more affordable for low-income individuals.  However, some states simply charge the same percentage for all properties.

Can I get a discount on the Stamp Duty?

Some buyers are eligible for a discount that makes stamp duty more affordable.  First-time buyers are able to get a discount in all states.  The exact reduction differs by state, but many states simply reduce the amount owed in stamp duty. 

New South Wales does not require first-time buyers to pay stamp duty for homes valued under $500,000.  This exclusion also applies to land valued under $300,000.

The Australian Capital Territory offers a concession for first-time buyers who are purchasing a home that is valued under $330,000.

Western Australia offers a concession for first-time buyers who are purchasing a home that is valued under $350,000.  This also applies to the purchase of land that is valued under $200,000.

First-time buyers in South Australia do not have to pay a stamp duty on homes valued under $80,000.  Concessions are offered for homes valued up to $130,000.

There is a concession in Queensland for first-time buyers who are purchasing a home valued under $500,000.  Land valued under $300,000 is also included.               

Use  the Mortgage Choice Stamp Duty Calculator to discover your stamp duty, transfer fee and mortgage registration fee for your particular property, whatever state you're buying in.

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