When it comes to purchasing your first property, the amount of government fees and extra add-ons can be a little overwhelming. After all, you likely haven’t had to deal with any of this before, and it’s natural to be anxious about getting it wrong.
If you are a first home buyer or new to property, whilst you may have heard of Stamp Duty, it is difficult to understand it unless you are actively going through the home buying process. So, to help you understand this particular tax, let’s get into everything that you should know about Stamp Duty.
First thing’s first…
What is Stamp Duty?
Stamp Duty is a tax that is placed on those purchasing property. This tax is governed by the different Territories and States, which means that you’ll be expected to pay different amounts depending on where your property is located. Aside from differences based on Territory and State, the amount of Stamp Duty taken will depend on the value of the property.
Long story short, Stamp Duty is a tax based on where you’re purchasing property and how much that property is worth. This is not a static amount, as Stamp Duty costs will change over time. To make sure you know exactly what you’ll be paying, it’s best to use a stamp duty calculator and do some research into Stamp Duty fees for your specific area.
In Australia, there is a number of instances in which you can receive a concessional rate when paying your Stamp Duty. For most Territories and States, this concession will include:
- First-time buyers
- Living in your home (rather than investment)
As mentioned, different governing bodies will have different stipulations in regard to Stamp Duty concessions. So, it’s best to do research into current rules and regulations for your area.
Changes to NSW Stamp Duty
This month has seen some of the largest changes to Stamp Duty in 30 years put into motion by the current NSW government. Under the proposed changes, the price brackets which are used to determine how much home buyers pay on Stamp Duty will begin to rise with inflation, starting in mid-2019. This makes NSW the first Australian state to index Stamp Duty brackets to the consumer price index.
This is expected to lower Stamp Duty considerably in the long-term, with marginal savings over the next three years. This is the first time that Stamp Duty in NSW has been changed in a substantial way since 1986, despite significant increases in the average price of properties.
Understanding what is expected of you as a first-time buyer will allow you to make more educated decisions when selecting a home. To learn more about the process of buying and beautifying your first home, stay up-to-date with the Hoot Homes blog, or explore our wide range of home designs and house and land package options today.