When financing for your new home, there are a range of costs that must be considered to ensure that the purchasing process is smooth and efficient. One particular cost that you may have heard from time to time is the term Stamp duty, now known as Transfer duty
… So, what is it?
Stamp duty is a tax levied by a State Government on certain transactions; predominantly when buying a home, land or investment property. The amount of stamp duty required depends on a number of factors including where you live, where the transaction takes place and the overall value of the purchase. Because of this, figuring out how much money you need to put aside for stamp duty can seem a little confusing.
Do I need to pay stamp duty?
If you are a first-home buyer, you may not need to pay any stamp duty depending on your eligibility for the State's First Home Buyer's Assistance Scheme. To be eligible, you must:
- Be buying or building your first home
- The home is new and no one has lived in it
- The property is valued at less than $750,000
Alternatively, you may be eligible for exemption or concession depending on individual circumstances. These concessions are usually granted to those on a pension, those who have received property from a deceased estate and those purchasing homes with a low value.
We recommend checking with your solicitor or conveyancer to confirm whether this is a possibility for you.
How much stamp duty will I need to pay?
As previously mentioned, the cost of stamp duty varies according to a range of factors. We suggest using the following online stamp duty calculator to get an idea about what you will be expected to pay.]
The amount required will change depending on whether you're a first home buyer, planning to buy an investment property or planning to buy a second home higher in value. Keep in mind, the higher the value of your property, the more you will be required to pay.
Alternatively, if you are not an Australian resident or citizen, you'll most likely face an additional stamp duty surcharge of 8% when purchasing property in NSW.
When will I have to pay stamp duty?
Usually, buyers are expected to pay stamp duty within three months of exchanging contracts if buying off the plan. However, if you are planning to live in your property, you can defer your stamp duty payment for up to 15 months after exchange.
Financing for your home is a daunting practice and can come with countless factors to consider. Luckily for you, Domaine has a team of experienced finance professionals who are happy to help you get on your journey. Contact us today to get in touch!