Stamp duty costs can take us by surprise when purchasing property. So what is Stamp Duty and why do we need to pay it?
In Australia, Stamp Duty is levied by our state governments and is a tax that is used to pay for the legal costs and documentation from the government when a property is sold; primarily for the title documents for the property. Some essential facts:
- Stamp duty needs to be paid within 30 days of settlement, although it is usually paid upon settlement
- Each state in Australia levies stamp duty differently, so ensure you have the facts before investing interstate
- It is calculated on a sliding scale depending on the value of the property
- Like all taxes it also goes towards paying for state facilities
There are some instances in which discounts or exemptions from Stamp Duty may be applicable. Those such as first home buyers and health care card holders may be eligible, but care must be taken to ensure you know the rules for the state in which you are buying your property. All states in Australia govern their Stamp Duty differently and so it pays to be well aware of your obligations, particularly if you are investing interstate.