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All about Stamp Duty and Other Government Charges on Property Purchase

A Step Ahead

All about Stamp Duty and Other Government Charges on Property Purchase

Read this article if you want to learn about calculating Stamp Duty and other Government Charges in New South Wales.

Standard Rates of NSW Stamp Duty (Transfer Duty)

Stamp Duty really is just a tax we pay for nothing much in return.

HERE’S HOW TO CALCULATE THE NSW STAMP DUTY:

Your Purchase PriceRate of NSW Stamp Duty
$0 – $14,000$1.25 for every $100 or part of the value
$14,001 – $30,000$175 plus $1.50 for every $100,
that exceeds $14,000
$30,001 – $80,000$415 plus $1.75 for every $100,
that exceeds $30,000
$80,001 – $300,000$1,290 plus $3.50 for every $100,
that exceeds $80,000
$300,001 – $1M$8,990 plus $4.50 for every $100,
that exceeds $300,000
$1,000,001 – $2,999,999$40,490 plus $5.50 for every $100,
that exceeds $1,000,000
Over $3M$150,490 plus $7 for every $100,
that exceeds $3,000,000

NSW Stamp Duty Discounts

There are various NSW stamp duty exemptions or concessions, in here you’ll find all the details of the most common so that you can see whether or not you may be eligible.

Concessions for Home Buyers

Home Buyers pay the full rate of duty in NSW, as above.

Concessions for First Home Buyers

Yes, there is some hope!

From 1 July 2017 the NSW State Government has announced the First Home Buyers Assistance Scheme:

  • First home buyers purchasing new or existing properties will receive a Stamp Duty exemption for purchases up to $650,000.
  • For purchases between $650,000 and $800,000 there’s a discount available:
    • Multiply the value by 21% and deduct $136,510.
      Eg.  $750,000 x 21% – $136,510 = $20,990 (and this would be the amount of duty payable).

Concessions for First Home Buyers purchasing Vacant Land

First home buyers purchasing vacant land to build a new home will receive a stamp duty exemption for purchase amounts up to $350,000.

Concessions are available for those purchasing new homes between $350,000 and $450,000.  If you fit in to this category, here’s how you calculate the stamp duty:

  • Multiply the purchase price by 0.1574 and subtract $55,090.

Off-the-Plan Purchases

Home buyers (occupying within 12 months of settlement for a period of at least 6 months) are eligible for a 12 month delay in payment of stamp duty (from the date of signing the contract, or at settlement, whichever occurs first).

If you’re purchasing as an investor however, you will not be eligible to delay payment of stamp duty.

Foreign Investors

From 1 July 2017, Foreign Investors pay a surcharge of 8%.

Other Government Fees:

There are many possible fees that you could encounter, depending on the nature of your transaction, however in this article we’ll address only the 3 you’re most likely to encounter during a property transaction.

  • Transfer Registration
  • Mortgage Registration
  • Mortgage Discharge Registration

In the New South Wales State Budget each year, the Treasurer will announce changes to the fees.

NSW Transfer Registration (when a ‘transfer of ownership’ is occurring)

When you purchase a property, there is a legal document that transfers the ownership of that property in to your name.

And the transfer of ownership has to be registered, and the State Government charges a fee for managing the register.

  • Effective the 1st July 2018, the NSW Transfer Registration fee is $141.60

NSW Mortgage Registration (when you are borrowing money)

The mortgage gives the bank the right to sell your property if you don’t pay them back.

  • The NSW Mortgage Registration Fee as at 1st July 2018 is $141.60.

The mortgage registration ensures that the mortgage can be viewed by a simple title search.

This therefore prevents you from selling your home and not paying back the lender – because the transfer of ownership wouldn’t be able to happen unless the previous mortgage was discharged.

NSW Mortgage Discharge Registration (when you are refinancing or selling)

This is payable when your existing mortgage is being discharged (released).

  • The NSW Mortgage Discharge Registration Fee as at 1st July 2018 is $141.60.

This is usually payable when you’re refinancing or selling.

However, if you’re purchasing a property, your new lender may prepare a Mortgage Discharge and charge you this fee.  Your solicitor arranging the settlement, will pass on that fee to the seller so that you’re not out of pocket.

Resources

General Information on just about everything to do with NSW Stamp Duty:
http://www.osr.nsw.gov.au/buying-or-selling-property

Registration Fees for Land Transfer and Mortgage Registration:
http://www.nswlrs.com.au/land_titles/fees

If you have questions or doubts on anything related to property purchase, feel free to call me on 0426223035 or Get in touch

 

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