First-time buyers often have the misconception that all they need is a down payment and monthly mortgage. Many people don’t realize there are plenty of other costs associated with homeownership; many first home buyers find themselves in trouble because this detail trips them up later on.
Aside from additional costs, stamp duty is something that usually surprises the homeowners while burning a hole in their pocket. Precisely because in Australia, there’s no standard rate of stamp duty, rather, every state has its own rates.
To simplify your query, this blog particularly aims to inform you of everything relating to NSW stamp duty.
What is Stamp Duty
Stamp duty is a kind of tax payable on certain purchases like property or land, as well as on distinct assets that fall under that banner.
The tax is levied by the Australian state and territory government on all the legal documents, agreements, and trusts implicated while purchasing an asset, precisely having legal ownership of a particular asset transferred to you.
Who is Stamp Duty payable to in NSW
In NSW Australia, stamp duty is payable to the Office of State Revenue. The transaction can be made by mail or BPay and there are several other ways as well. The money goes towards funding public sectors in NSW which put it back into our economy for a good cause. Usually, the government uses these funds to strengthen the sectors like health, emergency services, transport, education & training, and emergency services.
When do you require to pay the Stamp Duty in NSW?
Stamp duty is what you pay when you buy a property, and it can happen in two ways: either the contracts are exchanged and when the transaction is finalised. While buying a property you will need to pay the amount within 3 months after the completion of the transaction. To be more accurate, interest will start to accrue on that purchase from day one so be sure not to let more than 3 months go by before paying your stamp duty.
If an individual purchases their home with a loan after this window has expired without exchanging contracts first then they are liable for additional fees such as conveyancing costs (to draw up legal documents), mortgage registration charges (for registering the new borrower’s name over the title deeds) and also insurance premiums which may need updating.
In case you’re buying a residential unit of the plan, then the stamp duty should be paid within 15months of the deal.
How to find out how much stamp duty you’ll have to pay
One of the best ways to figure out your stamp duty is by researching from your end. No one would like to be left with the large unexpected tax on the day of purchase. Hence, an online stamp duty calculator can be a great help. This can help you give an exact idea of the tax, by feeding the dutiable value of the property, type of property, what are purchasing and location.
What are the rates for stamp duty
NSW stamp duty rates are separated into specific tiers to ensure fair and reasonable pricing for Aussies looking to buy property. However, the current rates for stamp duty in NSW are the following (this is to give you a general idea of exactly how much you may require to pay for your property):
$0 – $14,000
$1.25 for every $100
$14,001 – $31,000
$175 + $1.50 for every $100 where the value exceeds $14,000
$31,000 – $83,000
$430 + $1.75 for every $10 where the value surpasses $31,000
$83,000 – $310,000
$1,340 + $3.50 for every $100 where the value exceeds $83,000
$310,000 – $1,033,000
$9,285 + $4.50 for every $100 where the value exceeds $310,000
$41,820 + $5.50 for every $100 where the value exceeds $1,033,000
Premium transfer Duty
Over $3,101,000 (residential)
$155,560 + $7.00 for every $100 where the value exceeds $3,101,000
Who are exempt from paying stamp duty in NSW
First home buyers
First home buyers in NSW have been benefited under the first home buyer scheme. However, under the scheme, different exemption thresholds apply for a new home valued up to $800,000 and an existing home valued up to $650,000 or less and on vacant land (on which you intend to build a home) you may not need to pay stamp duty if it is valued under $400,000.
Exemption through a divorce
The exemption also applies if the ownership of a home or land is being transferred from one person to another due to a court order in divorce.
Besides, it’s also valid if the property is being transferred due to the owner being deceased.
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