What is Stamp Duty?

What is Stamp Duty?

What is Stamp Duty?

So what exactly is Stamp Duty is?

If you are planning on getting a residential or investment property it is imperative to consider the costs associated with that. Stamp duty is one of the costly upfront charges you need to give consideration to when making a new purchase.

Stamp Duty is basically a form of tax on documented transactions and purchase of other legal matters. The payable duties have different types and rates, depending on the type of purchase. The buyer is generally liable to pay Stamp Duty and the amount payable depends on the value and purchase price transaction.

We bring to you the general stamp duty payable in Western Australia. Buyer pays for the transfer duty or the transactions over dutiable property, there is a landholder duty which is paid on certain acquisitions in a land-holding corporation or unit trust scheme, insurance duty for premiums paid on certain insurance policies and the vehicle duty which is for the issue or transfer of motor vehicle licenses.

It is also important to note that the Australian Federal Government does not levy stamp duty. It is in fact levied by the State or Territorial Governments. It may seemingly confuse people as the payable duties vary significantly per state and type of transaction.

Stamp Duty Calculation

The duty payable will vary on the location of the property that you wish to purchase and its value. It can either be paid on a flat rate, and in other scenario, it is calculated based on the actual purchase price. If you plan to buy an investment property in another state, you must consider that it is not the home address that determines the payable stamp duty but the location of the property you wished to acquire.

Exemptions and rebates on Mortgage Stamp duty

Concessional rates and discounts are given on First time homebuyers or investors but payable stamp duty may considerably differ in every state. A time limit is also set if you will be claiming for concessions on stamp duty which will again vary in each state.

In WA, there is a discounted rate for transfer duty and it’s called the First Home Owners Rate (FHOR). First time homebuyers may qualify with FHOR for a home valued below $600,000. Generally, no duty is payable for a home that are below the $500,000 mark.

The unencumbered value of the vacant land must not exceed $400,000 for the purchaser to be eligible for FHOR of duty. No payable duty for vacant land that is below $300,000.

WA First Home Owner Stamp Duty Established Home
Property Value Duty Payable
$0 – $500,000 $0
$500,000 – $600,000 22.51% of value over $500,000

 

WA First Home Owner Stamp Duty Vacant Land
Property Value Duty Payable
$0 – $300,000 $0
$300,001 – $400,000 $13.01 Per $100 or part thereof above $300,000

 

Concessional Rate (Owner-occupied & under $200,000)
Property Value Duty Payable
$0 – $100,000 1.50% of value
$100,001 – $200,000 $1500 + 4.39% of dutiable value over $100,000
Over $200,000 Normal Stamp Duty Rates

 

Stamp Duty Rates & Discounts (Rent Out or Owner-occupied)
Property Value Duty Payable
$0 – $120,000 1.9% of dutiable value
$120,001 – $150,000 $2280 + 2.85% of dutiable value over $120,000
$150,001 – $360,000 $3135 + 3.8% of dutiable value over $150,000
$360,001 – $725,000 $11,115 + 4.75% of dutiable value over $360,000
Over $725,000 $28,435 + 5.15% of dutiable value over $725,000

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