A Beginners Guide to Stamp Duty
When it comes to purchasing real estate in Tasmania, 'Property Transfer Duty' which most people call Stamp Duty, is often one component of the transaction that’s surrounded by confusion and misconception. Today, we’re going to cut through the noise and lay out the key things you need to know, so when it comes to signing on the dotted line, you’re ready and in control.
Stamp Duty Tasmania
If purchasing your first property, this may be the first time you’ve heard of Stamp Duty. Basically, it is the tax paid on the purchase of every property and is calculated as a percentage of the sale price and paid at settlement.
Stamp Duty in Tasmania is calculated in addition to the advertised sale price, so when searching for a property, it’s worthwhile getting an indication of the cost to ensure your budget can stretch that far.
Must foreign investors pay Stamp Duty in Tasmania?
If you’re not considered an Australian citizen or permanent resident, it’s important to be aware that additional charges may apply. Foreign investors, corporations and trustees can incur a hefty Foreign Investor Duty Surcharge in addition to Stamp Duty when purchasing property in Tasmania.
Tasmanian Stamp Duty concessions
The State Government has introduced several concessions to help give first home buyers, builders, and pensioners a leg up in the property market. These concessions are ever-evolving, so it’s worth speaking to your conveyancer or legal team before assuming you’re eligible.
The current concessions in Tasmania:
- Tasmanian Stamp Duty concession for first home buyers - This 50 per cent discount on Stamp Duty applies to anyone purchasing an established home as their first property. In other words, a property which has already been built and is ready for purchase. The discount is meant to help first home buyers get into the property market and can only be claimed if the property’s sale price is $400,000.00 or less.
- Tasmanian Stamp Duty concession for pensioners - This is a 50 per cent discount in Stamp Duty for eligible pensioners who choose to sell their home in Tasmania, and downsize by purchasing real estate for $400,000.00 or less.
- First home owner grant - This $20,000 grant is available to those buying a brand new (freshly built) home which has not yet been occupied, or those building their first home. There are a number of eligibility criteria which an applicant must meet to be eligible, so it’s important to seek advice and the most current information before making a purchase decision.
If you’re relying on a concession, it’s a good idea to seek professional advice to confirm your eligibility.
When can a concession be claimed?
Most home buyers choose to claim a concession at the time of purchase, however, it can also be claimed retrospectively, when you’ve moved in and are enjoying your new home.
At Rae & Partners, we understand that when making life’s big decisions, it’s important to surround yourself with people who have your back. Our property law specialists are here when you’re ready for your next move, to advocate for you and ensure the transaction goes smoothly.
Contact us to meet with a lawyer or law clerk experienced in property law.