What is stamp duty and how does it work?

If you’re new to buying property, you may not understand what stamp duty is. 

In a nutshell, stamp duty is a government property tax. It’s something that goes in hand with purchasing property.

In this article, we’ll explain what stamp duty is, how much it costs and why you might have to pay it.

So, what exactly is stamp duty?

Stamp duty is a charge applied by state governments on transactions relating to the transfer of land or property. You generally need to pay it for any property purchase.

How much is stamp duty?

Stamp duty is calculated as a percentage of your property’s purchase price. However, the amount also depends on a few factors such as the state or territory in which you’re buying and the type of buyer you are.

There are a few stamp duty calculators online that can help take the guesswork out of budgeting for a property.

Using this calculator as an example, if you bought a $700,000 established home as a primary residence, you could expect to pay the following in stamp duty:

If you fall into the first home buyer category and meet certain requirements, you may be entitled to stamp duty or concessions up to a certain value. We’ve outlined the specifics here.

Budgeting for stamp duty

 When creating your purchasing budget, it’s important to factor in how much stamp duty you’ll need to pay. Stamp duty can be costly, so it can really affect the type of property you may be able to afford.

Keep in mind that lenders may also want to see proof of savings to cover the stamp duty costs in addition to your deposit when applying for a loan.

We recommend you get advice from a trusted mortgage professional or conveyancers about how stamp duty may affect you.

Still have questions?

If you need further help navigating stamp duty and are eager to find out your borrowing power, get in touch with our expert lending team today. Post navigation