The taxes that an Australian state or territory receives from the purchase or market value price (whichever is the higher of the two) of a home is known as Stamp Duty, or [Property] Transfer Duty in Tasmania and Queensland. Typically, Stamp Duty is viewed as an initial buyer’s cost, but some Australian states are exempting or relieving some of the Stamp Duty costs for first-time homebuyers as of August 2021. Moreover, mortgage lenders may offer to add the cost of the Stamp Duty to your overall mortgage loan.
Costs by each state. Each Australian state and territory taxes and appreciates each property differently. Buyers will need to use a Stamp Duty calculator provided by a broker or inquire with a tax expert to understand better the expected Stamp Duty cost with the purchase or mortgage of your property.
First-time homebuyer Stamp Duty exemptions and relief. Depending on the location of the property and your status as a homebuyer, several states and territories assist in lessening the stress for first-time homebuyers, including but not limited to New South Wales offers a Stamp Duty exemption with their First Home Buyers Assistance scheme for a property valued up to $650,000 or concessions for property values up to $800,000. Victoria also exempts first-time homebuyers from Stamp Duty for a property valued at $330,000 and partial concessions for property values between $330,000 and $750,000.
Insurance and loan options. If you are not a first-time homebuyer or your property of interest does not qualify you for an exemption or relief, you may want to consider Lender’s Mortgage Insurance (LMI) or Guarantor Loan. LMI is a fee charged by mortgage lenders payable by the homeowner upon settlement to help the homeowner pay additional property costs. A Guarantor Loan requires an Australian family member, such as a permanent resident parent, to apply some equity, usually 20%-27%, from their current loan towards your mortgage loan or costs.
Talk to a specialist mortgage broker if you have Stamp Duty concerns. Stamp Duty may be factored into the total cost of your mortgage loan, but it is dependent on your mortgage lender, and keep in mind that it is in your best interest to pay the Stamp Duty out of pocket to reduce the cost and interest on your mortgage loan in the long run.