This discussion relates to the stamp duty requirements in
New South Wales for the purchase of residential property. Each State will have its own particular rules.
Our Article covers the major general stamp duty effects for
residential property. However, you should contact the
Office of State Revenue to confirm stamp duty liability for
your particular situation.
Stamp duty is payable on the transfer of ownership of the
property and is payable by the Buyer under the REI contract.
In New South Wales, you will need to pay stamp duty within 3
months from the date of your exchange of Contracts. If the
duty is not paid within three months of "first execution" a
penalty arises under the Taxation Administration Act 1996.
Interest becomes payable on the unpaid tax on a daily basis.
Mortgage duty is being
phased out, and is not payable by home owners from 1
September, 2007 or investment buyers from 1 July 2008 (see
below).
The amount you pay depends on your particular circumstances.
If you are a FIRST homebuyer you may be entitled to a
significant concession. If you are buying a property
over $3M and the Contract is dated ON OR AFTER 01 June 2004,
you will pay a higher stamp duty rate. Click on our
Stamp Duty Calculator below.
In some circumstances, you as Buyer may be eligible under the First Home Plus Scheme which provides exemptions and concessions on stamp duty and mortgage duty to first home or land purchasers under contracts signed
ON OR AFTER
01 July
2004. If your Contract is date is BEFORE 1 May 2007,
click here for the
eligibility criteria. There is no income or assets test, but there are restrictions on eligibility, as follows:
At least 50% of the property must be
purchased by an eligible Buyer.
NOTE: Where eligible Buyers
are acquiring more than 50% but less that 95% then your stamp duty
concession will be reduced accordingly.
At least one (1) eligible Buyer is required to occupy the property as
their principal place of residence on
or before completion or within 12 months after completion for a
continuous period of six (6) months.
Or in the case where you are purchasing land then at least one of the
eligible Buyers must be intending to build their principal place of
residence on that land, with the view of living in the house within 12
months of purchase and for a period of six (6) continuous months.
All Buyers must be individuals. Companies and Trusts cannot
claim any concession or exemption.
All eligible Buyers must be FIRST property buyers
- where a Buyer has owned residential property before
in Australia, then that Buyer will be ineligible for the concession
and the concessional rate may be reduced.
All Buyers must be 18 years old or more.
At least one Buyer must be an Australian
citizen/permanent resident.
If an eligible Buyer is married or in a
de facto relationship, and their spouse has owned a property before,
then that Buyer will be ineligible for the stamp duty concession and
the concessional rate may be reduced.
The
new concession rate changes based on price, but is no
longer dependent on the location of the property, as well as whether it is house and land or just land.
If you are still unsure as to whether you fit the
criteria you should always check with the NSW Office of
State Revenue what the status of your concession is.
They will also be able to calculate an proportionate
reduction you may have in your concession rate.
Click on the Stamp Duty Calculator above to calculate your concession.
B. Stamp Duty on Finance raised to Purchase
Duty on mortgages for owner occupied housing was abolished
on 1 September 2007.
Owner occupied housing
From 1 September 2007, mortgage duty will not be chargeable if the
mortgage secures an advance or advances made for the purpose of owner
occupied housing and no other advances. Borrowers must be
natural persons.
Investment housing
From 1 July 2008, mortgage duty is not chargeable if the mortgage
secures an advance or advances made for the purpose of investment
housing and no other advances. Borrowers must be natural
persons.
1 July 2009
Mortgage duty is abolished. NSW mortgage duty will not be
chargeable on advances made on or after 1 July 2009.
