Last Updated: 4th June 2020
Stamp duty could be thrown out in New South Wales under a new taxation review to be handed to the state government this week.
While it is said that stamp duty could be gradually replaced by an annual land tax and home buyers could "opt in" to a new property system or receive a credit for past duties, under reform options for the NSW and Victorian governments, it has not been confirmed.1 Potential reforms in this space could save home-buyers tens of thousands of dollars and go a long way in helping many Australians in the home-ownership affordability crisis.
But first let’s get the facts straight about stamp duty as it stands today.
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 if you are looking to buy.
How much would I expect to pay in stamp duty?
The exact amount of stamp duty homebuyers would pay depends on the location of the property. Each state has its own stamp duty tax, and you can 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.
What would these changes mean for home buyers?
On median house prices, Sydney and Melbourne buyers currently pay more than $40,000 in stamp duty.2 The high costs of stamp duty make a call for change important.
Stamp duty costs can make it difficult for new buyers to enter the real estate market. Not only that, but stamp duty no longer goes exclusively toward legal fees related to a single transaction.
While nothing has been confirmed, hopefully any new stamp duty or other tax structures introduced would be beneficial for both the government and new home buyers.
Don’t want to miss out? Be the first to know.
Stamp duty can be a big cost on top of a property purchase. While an announcement about the abolishment of stamp duty has not been made yet, it is set to be announced soon.
If you want to stay in the loop and be the first to know, contact your local Mortgage Choice broker.