How much will you need to pay in stamp duty when buying a property?
Our state-by-state guide reveals the government charges you can expect to pay.
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Stamp duty. It was only supposed to last three years when it was introduced back in the 19th century. Yet today it remains a necessary evil for those purchasing anything from a vehicle to a house in Australia.
When buying a house, stamp duty is generally calculated based on the property value or sale price - whichever is higher. However, the exact calculation method - as well as any applicable reductions or discounts - varies considerably from state to state. Some states will also take into account the home loan amount versus your deposit in their calculations - which could affect those relying on high mortgages or bad credit home loans.
If you are a first home buyer and/or buying a newly-built home, some states may offer you reductions in stamp duty, while others instead offer a grant on settlement. Some states even offer both. In addition, concessions can be available to charities, family farm purchasers and pensioners in many states.
it's also important to remember that in most states, stamp duty isn't the only government charge payable when buying a property. Charges such as a mortgage registration fee and a property transfer fee usually also apply, with the amounts charged also varying significantly between states. These fees are payable to the state where the property is located (not the one you reside in) and are usually due within three months of settlement. Overseas buyers may also incur additional fees.
So how much will you end up paying in government fees when buying a house? it depends entirely on:
- the value/sale price of the property.
- which state the property is located in.
- whether you're a first home buyer or not.
- whether you're buying a new, existing, or off-the-plan property.
- whether the property will be your principle place of residence (ppr) or an investment property.
Victoria
Stamp duty on property in Victoria is calculated on a sliding scale. At the top end, you'll pay 5.5% of the purchase price on a property valued at $960,000 or more. At the other end, you'll pay at least 1.4% of the purchase price for any property sold for more than $25,000.
Other government fees you'll need to pay include a mortgage registration fee of $85 to $107 and a land transfer fee up to a maximum of $1,339.
In addition to a $7,000-$10,000 first home owner's grant (FHOG) on new dwellings, the Victorian state government offers a first home buyer duty reduction (fhbdr) for both newly constructed and established homes. This equates to a stamp duty reduction of 50% and applies to all properties valued up to $600,000. You must qualify for the FHOG in order to receive the fhbdr.
New South Wales
In New South Wales, duty on the transfer of land is calculated in different ways, depending on the value/sale price of the property.
Properties sold for (or worth) up to $14,000 incur a $1.25 fee per $100. While it doesn't translate exactly to a percentage, it's easiest to think of this as roughly 1.25% of the property value.
Thereafter, properties of a higher value incur a flat fee plus a percentage - both are calculated on a sliding scale based on the property's sale price. So for properties worth $14,001 to $30,000, it's $175 plus $1.50 for every $100 that exceeds $30,000. For properties worth over $3 million, it's $150,490 plus $7 per $100 that exceeds $3 million.
New South Wales offers duty reductions for first home buyers purchasing a new dwelling - often, it can mean paying only a few hundred dollars in government charges. Unlike in Victoria, however, there are no reductions for other buyers who plan on using the property as their primary place of residence.
Queensland
Queensland calculates duties using a similar method to new south wales, though the amounts and boundaries are different.
There is no flat fee on properties of up to $75,000, though a $1.50 fee per $100 of value applies on sales between $5,001 and $75,000. The flat fees then slide from $1,050 on a property sale price of $75,001 up to a maximum of $38,025 for high value properties, while the duty per $100 slides from $3.50 to $5.75.
Mortgage registration fees are a flat $157.40, but land transfer fees are complicated. A fee of $162.90 is payable regardless of the property sale price. Then for every $10,000 dollars that the sale price exceeds $180,000 a further $30.80 is due.
Queensland gives duty discounts to first home buyers, as well as anyone planning to use the premises as their primary place of residence.
South Australia
South Australia has a complicated system of government charges on property transfers. However, revenue s.a. recommends using the following simplification as a guide:
Assuming you're buying a property for more than $12,000, you'll pay a flat fee between $120 and $21,330 based on the sale price. You'll also pay between 2% and 5.5% of the property price - calculated on a sliding scale.
Interestingly, neither the flat fees nor percentage fees increase any further once a property's value exceeds $500,000.
While first homeowners in South Australia can receive a grant of $15,000 for newly-built homes, they do not receive a concession on government charges payable.
Transfer fees in South Australia are far more expensive than in other states - a $500,000 house incurs a fee of nearly $4,000 (compared with just a few hundred dollars in many other states).
Western Australia
If you're lucky enough to find a residential property under $120,000 in Western Australia, you'll pay just 1.9% of the sale price in duty. For purchases of $120,001 or more, a fee of between $1,520 and $19,665 applies, depending on the sale price. An additional fee of 2.85% to 5.15% is also due - again calculated based on the property's sale price.
WA is also one of the best places in Australia to buy an existing property if you're a first home buyer - you'll pay no fees on any property worth up to $430,000 and a concessional rate thereafter.
The state mortgage registration fee is a low $164 and the land transfer fee will be below $554 unless you're buying a place for more than $2 million.
Northern Territory
the equation for calculating property duties in Northern Territory looks like this:
d = (0.06571441 x v2) + 15v
where
d = the duty payable in $
and
v = the dutiable value
1000
most of us would have a better shot at figuring out the equation for natural selection than calculating the duty on a $500,000 house in Darwin.
Thankfully, the NT treasury provides a handy Stamp Duty Calculator to help figure it out.
Both the mortgage registration fee and land transfer fee are set regardless of the property's value - each at $142. In addition, the Northern Territory helps out first home buyers with a grant of up to $26,000 for new dwellings - though this is paid to the purchaser separately rather than removed from duty fees.
Tasmania
Unless you somehow find a house in Tasmania for less than $3,000, you'll pay a fee somewhere between $50 to $27,810 plus 1.75% to 4.5% (calculated on the sale price).
Other government fees in Tasmania are generally low, with the mortgage registration fee and land transfer fee adding just a few hundred dollars in charges.
The apple isle also offers some of the country's most generous first home buyer grants - up to $30,000 for a new dwelling, though this is handled separately from government charges.
Australian Capital Territory
The ACT takes a unique approach to stamp duty. Fees are initially calculated on a similar basis to other states - $3,600 to $43,350 plus 3% to 5.17% for properties between $200,001 and $1,454,999.
However, the government then calculates an income-contingent concession that applies to any household bringing in less than $160,000 per year (with further discounts for households with dependent children). So if your financial circumstances meant relying on a bad credit home loan, you may be eligible for stamp duty reductions if you're purchasing property in act.
The act also offers discounts on government fees to those purchasing vacant lots of land.