Stamp Duty Explained!

Monday 07 March, 2022

Stamp duty defined

Stamp duty is a government tax that applies to certain transactions. You'll pay stamp duty when buying a new care, or when taking out an insurance policy. But the one you'll be most familiar - and the one we'll address in this blog - is the stamp duty payable on real estate.

Stamp duty in Australia

There is no national standardised fee when it comes to stamp duty – all states and territories impose their own rules. So, the amount you need to pay will depend on:
• The state you live in
• The type of property you are buying – if it’s your primary residence, or an investment property
• Whether or not you’re a first home buyer
• Whether you’re purchasing an established home, new home, or vacant land
• Whether you’re classified as a foreign purchase

Stamp duty in Tasmania

In Tasmania, stamp duty is officially called “property transfer duty” (but we’ll keep referring to it as stamp duty to make it easier). If you purchase property, you’ll have to pay it – and generally, the more expensive your property, the higher your stamp duty.

Stamp duty is an upfront cost, so it’s not actually covered by your home loan. Therefore, your house deposit may be impacted by the amount of duty you have to pay. You may find that you no longer have a 20% deposit (because you hadn’t factored in stamp duty), and you’ll likely have to take out lenders mortgage insurance (LMI) to cover the cost of your loan.

Stamp duty must be paid within three months of the property transfer; otherwise, you may incur a penalty tax and interest.

Your conveyancer or solicitor will usually organise to pay stamp duty on your behalf.

Value of the property:

Duty payable:

Not more than $3,000

$50

More than $3,000 but not more than $25,000

$50 plus $1.75 for every $100, or part, by which the dutiable value exceeds $3,000

More than $25,000 but not more than $75,000

$435 plus $2.25 for every $100, or part, by which the dutiable value exceeds $25,000

More than $75,000 but not more than $200,000

$1,560 plus $3.50 for every $100, or part, by which the dutiable value exceeds $75,000

More than $200,000 but not more than $375,000

$5,935 plus $4.00 for every $100, or part, by which the dutiable value exceeds $200,000

More than $375,000 but not more than $725,000

$12,935 plus $4.25 for every $100, or part, by which the dutiable value exceeds $375,000

More than $725,000

$27,810 plus $4.50 for every $100, or part, by which the dutiable value exceeds $725,000

Source: State Revenue Office of Tasmania

Rates correct as of 22 February 2022

Stamp duty calculator

If you can’t get your head around what you’ll pay (and let’s face it, there’s a lot to have to figure out!) – head over to our handy stamp duty calculator.

Stamp duty concessions

There are a few government schemes available to help mitigate the cost of stamp duty. Below is a broad overview of concessions and exemptions in Tasmania. Read more information at the State Revenue Office website

Please note that with all of the following, eligibility criteria applies.

First home buyers

If you’re a first home buyer, you might be able to receive a 50% discount on stamp duty. This concession is available for buyers purchasing an established home valued at $500,000 or lower. However, this is not available to applicants who have received the First Home Owner Grant.

Pensioners downsizing

Are you a pensioner and wanting to sell your home to purchase another smaller established house? You may be eligible to receive a 50% discount on stamp duty – but only if the new home is valued at $500,000 or less.

Deceased estate

You may receive a concession if you receive property as a beneficiary of a will or inheritance.

Property transfer between partners

You may be exempt from paying stamp duty where the property is transferred between partners in a marriage, or those in a significant or caring relationship.

Stamp duty explained further

If stamp duty still seems confusing, you know what to do!

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