What Is Stamp Duty?
Stamp duty is a one-time government fee. When you buy land or property and some other assets, you need to pay stamp duty. This is the tax levied by the Australian state and territory government on all legal documents, contracts and trusts involved when purchasing assets or transferring the legal ownership of said assets to you.
In NSW, the stamp duty is payable to the Office of State Revenue as ‘transfer duty' or 'business tax’. Stamp duty is a tax, so the money will be used in the state government budget.
Types of Stamp Duty
You must pay the stamp duty in NSW when you buy:
Properties;
Vacant land or farm;
Commercial or industrial properties;
A business;
Or transfers of a property, a business, or certain shares.
Foreign property investors will need to pay the additional 4% stamp duty, on top of the standard property stamp duty.
Property transfers between parents & children, between married couples, or between other immediate families will also require stamp duty being paid. A valuation will need to be conducted by an independent valuer, and then stamp duty needs to be paid accordingly.
How To Pay Stamp Duty?
Stamp duty must be paid within 3 months after the completion of property sales in NSW. Your solicitor or conveyancer will apply for customs assessment and organise payment on your behalf. This is usually done during the settlement process, and they may inform you whether you are eligible for any benefits or exemptions.
How To Avoid Stamp Duty?
Most homebuyers in NSW are required to pay stamp duty, but if you are the first home buyer, you may be eligible for an exemption or discount.
New South Wales's first home buyer assistance scheme provides stamp duty exemption for buyers who buy properties worth less than $650,000. Property worth between $650,000 to $800,000 can also enjoy preferential tax rates. Buyers who purchase vacant land worth less than $350,000 for the first time can also enjoy stamp duty exemption. And preferential treatment for vacant land worth between $350,000 to $450,000.
How Is Stamp Duty Calculated?
The tax is calculated based on the market value of the property. Therefore, the more expensive the property, the higher the stamp duty. For instructions on how to levy stamp duty according to the value of the real estate, try our stamp duty calculator, and see how much you need to pay. https://www.moremorefinance.com/calculators
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