Buying your first home is a dream come true for many renters across the country. But did you know there are some additional fees and charges you may need to pay? Aside from legal and conveyancing costs, you’ll also need to consider stamp duty. Stamp duty is essentially tax you pay to the government when you purchase a new home in Australia. Luckily, there are many first-time buyer stamp duty concessions available that can help reduce your costs.
To help you understand what stamp duty you will have to pay, Darren Walters, CEO and founder of No1 Property Guide, has put together this article covering the different factors you’ll need to consider when buying your home.
If you’re ready to take that first step towards homeownership, fill in our pre-qualification form and one of our New Home Specialists will be in touch to discuss your factual new home options. We’ll guide you throughout the journey and explain any additional fees and charges, like stamp duty, you may need to pay.
What is Stamp Duty?
Stamp duty is a tax you pay the government when you buy or build a new home. The amount you pay will be based on the value of the property. As well as any concessions or rebates you are eligible for. Stamp duty is a one-off cost every time you purchase or trade property, and you will pay this for every property you buy or trade in Australia.
Some states are currently considering offering an annual property tax alternative instead. This is an attempt to lower the upfront cost of purchasing a home, as well as the financial burden for those who may end up buying and selling their family home multiple times.
However, this isn’t yet an option across the country. So home buyers still need to pay the upfront costs of stamp duty for the time being.
Does First-Time Buyer Stamp Duty Vary Between States?
Stamp duty varies depending on where you live or are buying as it is a tax you pay your state government. It will also vary depending on the value of the property and any concessions you are eligible for. On top of charging different amounts of stamp duty, states and territories will also offer different concessions and rebates, which can have a big impact on how much you need upfront for your new home.
How Much Stamp Duty Will I Need to Pay?
There are a few factors that go into how much stamp duty you’ll pay. As a general rule, stamp duty is roughly 2-5% of the purchase price of the property. But each individual circumstance is different.
In most states, first-time buyers will get a concession or a lower stamp duty charge. But in some cases, first-time buyers won’t need to pay stamp duty at all! In fact, first home buyers purchasing a new home in QLD won’t need to pay stamp duty if the property value is under $500,000. But in Tasmania, the same first home buyer would be looking at roughly $18,000 in stamp duty. And that’s on top of the purchase price of the new home.
This stamp duty calculator can help give you a rough idea of what stamp duty you might have to pay.
Of course, the cost of stamp duty will go up and down depending on the purchase price. And some grants and concessions are only available at certain property values or income levels. Understanding how much stamp duty you’ll need to pay can be tricky, which is why our Mortgage Managers handle it all for you.
Our team will guide you throughout the journey and inform you of any legal fees you’ll need to pay. We can even help you apply for any grants and concessions you’re eligible for. To understand your new home options, fill in our simple pre-qualification form and one of our New Home Specialists will be in touch to discuss how we can help you with your first home.
What if I’m Buying an Investment Property?
Unfortunately, in almost all cases there are no stamp duty concessions or grants available for investment properties. Even if you are a first-time buyer. Most First Home Owner Grants will require you to live in the property for the first year to qualify. However, once that first year is over you have more flexibility with your options.
If you want to take advantage of first-time buyer stamp duty concessions on your investment property, consider living in the property as your principal place of residence for the first year. Then, once you have fulfilled the criteria of any exemptions and concessions you received. You can move out and utilise the home as an investment property as you intended.
Just make sure you’re fully aware of all terms and conditions around your stamp duty grants. Otherwise, you may end up needing to pay the full amount because you moved out or sold the property early.
How is the Stamp Duty Calculated on a New House and Land Package?
At No1 Property Guide, we specialise in no or low deposit house and land packages. But there’s more to them than just an affordable option for entering the property market. Using our house and land packages to enter the property market means you will be paying less stamp duty. And that’s before you consider concessions!
When you’re building a house, you’ll only pay stamp duty on the value of the land you buy. So, if your state has no stamp duty grants, or you’re not eligible, this is the easiest way to reduce your stamp duty without sacrificing the quality of your home.
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Our Mortgage Managers and New Home Specialists understand the ins and outs of stamp duty across Australia. And can guide you through the process to ensure you fully understand what fees you’ll need to pay upfront when building your dream home.
Ready to take the leap into homeownership and own your first home? Fill in our simple pre-qualification form to get started. This gives our New Home Specialists the information we need to calculate your borrowing capacity through Darren’s no or low deposit new home system. From there, one of our team will give you a call to discuss all your factual new home options.