Posted by: Jozefina Ndoci | Date: 20 September 2016
Transfer duty, formerly known as stamp duty, is a state government tax payable on most transactions related to property. It is calculated based on the purchase price of the property or the value of the property; whichever is higher.
For residential property, transfer duty is payable in the following circumstances:
Transfer duty varies also depending on whether or not a concession or exemption is available to the purchaser or transferee.
You can claim a transfer duty concession if you are purchasing:
The first home concession is available for all you first home owners who have never owned property anywhere in the world. Ever. As such, it can only be claimed once in your life.
This concession saves you a substantial amount of money. For example, your duty on a $499,000.00 property will be NIL (compared to the investment rate transfer duty amount of $15,890.00).
This concession is available for first home buyers who purchase land as their first property with intentions to build their first home. As with the first home concession, it can only ever be claimed once.
For example, if you are purchasing a block of land worth $350,000.00 as your first property to build your first ever home on, the concession transfer duty amount will be $8,250.00, whereas with no concession, you are looking at paying $10,675. Again, this is substantial amount of money that you will save.
This concession is available for home buyers who have held an interest in a home before but who are purchasing another home to be their principal place of residence. This concession can be claimed multiple times.
People do not realise that even though they are not eligible for a first home concession, they are still eligible for this home concession, which will save you thousands of dollars in the long run each time you purchase a new principal place of residence. For example, a property worth $800,000.00 incurs stamp duty of $29,025.00, however by claiming the home concession, your stamp duty will be $21,850.00.
This concession also applies to those first home buyers who purchase a property over the threshold of $550,000.00.
Interestingly, there is no concession available if you purchase vacant land and it is not your first property purchase (even if you intend to build your home on the land).
There is a strictly enforced list of eligibility requirements. The state government monitors compliance via computer data matching. If you get the concession and are later found to have not complied with any of the eligibility criteria, you can expect a bill from the government for the amount of the concession, plus penalties and interest.
For both the First Home concession and First Home Vacant Land concession, a purchase will still be classed as your first purchase even if you owned land prior to that as trustee for a trust or as trustee for another person.
We can assist you in claiming these concessions, provide you with advice and we also provide in-house transfer duty lodgement. We have handled thousands of duty assessments over the years, and can let you know where you stand.
If you have any questions regarding your eligibility requirements or how to claim your concession, please contact FC Lawyers.