What is Stamp Duty?




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What is Stamp Duty?

In the most basic of terms, Stamp Duty refers to the taxation the government puts on certain transactions. However, it is important to know how Stamp Duty relates to the purchasing of property. This will help you make sure you are getting into a situation that you can actually afford.

Stamp Duty normally applies on purchases such as vehicles, insurance policies, and – yes – real estate. When it comes to buying new property, Stamp Duty can sometimes be known as land transfer duty.

When it comes to Stamp Duty, the amount is dependent on each individual transaction. Some of the factors that go towards calculating the amount are the type of transaction, where it is taking place, and the value.

How much stamp duty can I expect to pay?

While the charges differ across Australia, there are stamp duty calculators available that can help you see exactly what kind of duty is due on the land you are looking to buy.

The amount of stamp duty can be impacted by a few things such as: What type of property you are buying, whether it is your first home or not, whether it is an established home, a new build, or vacant land, as well as if you are a foreign purchaser.

Can stamp duty be added to a home loan?

Stamp duty generally needs to be paid at settlement of your purchase, with your solicitor or lender (usually) taking care of it for you – they will generally request the duty amount be included in the payment to them.

Because the stamp duty is an upfront cost it cannot be rolled into your home loan. However, if the payment of stamp duty means you no longer have access to the 20 percent deposit there are options such as lenders mortgage insurance to assist you cover the immediate costs of your loan.