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Stamp duty discounts for first home buyers

One of the major hurdles to buying property in Australia for first home buyers is the cost of stamp duty, which, depending on where you’re buying, often seems almost as much as the amount you’ll need to save for the deposit.

Stamp duty – a tax on the sale or transfer of land – is invested into the economy by state and territory governments and used for things such as health, transport and roads, police, justice and emergency services.

In Australia, it has increased along with house prices. These days, a first home buyer purchasing an established home in NSW for $800,000, will most likely need a 10% deposit of $80,000, plus an extra $31,768 for stamp duty, which is no drop in the ocean.

uno’s stamp duty calculator enables users in any state to work out stamp duty by entering a number of variables.

To make things easier for our customers, we’ve also linked our stamp duty calculator to our funds required calculator, so you can find out how much deposit you have left once stamp duty is accounted for, and how much you will need to borrow from your lender to pay for the house you’re interested in.

The amount of stamp duty you’ll pay depends on a number of variables. Whether you’re purchasing a an investment property or a principal place of residence are all taken into account.

Thankfully, a number of stamp duty concessions exist for first home buyers in different states, although you’ll have to meet eligibility criteria.

Stamp duty concessions and discounts state by state:

Stamp duty concessions for first home buyers in New South Wales

Thanks to the NSW government, first home buyers in NSW are exempt from paying stamp duty on new and existing homes valued at up to $650,000. Buyers of first homes used as a residential property and worth between $650,000 and $800,000 are eligible for stamp duty discounts of a few thousand dollars. For example, the purchase of a property valued at $750,000 in NSW by a first home buyer would receive a discount of $8,250 in stamp duty, making the total $20,990 rather than the $29,240 that would have to be paid by non-first home buyers.

Stamp duty concessions for first home buyers in Victoria

In Victoria, you may be eligible for the first home buyer duty exemption or concession if you purchased a home under a contract signed on or after 1 July 2017 and:

  • The dutiable value of the home is $600,000 or less – to receive the first home buyer duty exemption.

For example, the stamp duty on a $500,000 property for a home buyer is $21,970, whereas for a first home buyer it is $0.

  • The dutiable value of the home is between $600,001 and $750,000 – to receive the first home buyer duty concession.

The concession applies on a sliding scale: the higher the value of the property is to $600,001, the greater the concession.

For a general home buyer purchasing a home valued at $650,000, the stamp duty would be $34,070, for example, whereas for a first home buyer the duty is reduced to $11,356.

Stamp duty concessions for first home buyers in the Australian Capital Territory

The ACT has what’s called the Home Buyer Concession Scheme (HBCS), where stamp duty is charged at a concessional rate. To claim the HBCS, the value of a new home must be more than $470,000 but less than $607,000. To be eligible, vacant land for building a new home must be purchased for more than $280,000 but less than $323,300.

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Stamp duty in the Northern Territory

The Northern Territory Government has introduced increased stamp duty assistance for first home buyers who purchase an established home in the Northern Territory up to the value of $650,000.

The scheme provides a stamp duty discount of $23,928 for first home buyers of an established home, plus a further $10,000 renovation grant of which $2000 can be spent on household goods.

Stamp duty concessions for first home buyers in Western Australia

In Western Australia, when a home buyer is eligible for the First Home Owner Grant, a concessional rate of transfer duty will apply if the value of the property is below certain thresholds: less than $530,000 for the value of a home, or for the purchase of vacant land where the land value does not exceed $400,000.

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Stamp duty concessions for first home buyers in South Australia

For first home buyers in South Australia, an off-the-plan stamp duty concession of up to $21,330 (capped at stamp duty payable on a $500,000 apartment) is available for those purchasing a new or substantially refurbished apartment up until 30 June 2018. The concession is in addition to the FHOG.

A partial stamp duty concession is available for off-the-plan apartments with contracts entered into between 1 July 2014 and 30 June 2018 inclusive.

Stamp duty concessions for first home buyers in Queensland

If you’re purchasing property as a first home buyer in Queensland, you don’t have to pay transfer duty on homes valued at $500,000 or less.

Stamp duty concessions for first home buyers in Tasmania

In Tasmania, there are currently no exemptions on stamp duty for first home buyers.

Please note these figures are subject to change and usually come with deadlines, so be sure to check the revenue site in your state (listed above) for updates.

Can I borrow to pay for stamp duty as part of my home loan?

While you can’t borrow for stamp duty as part of your home loan, in order to pay for it you can effectively subtract the amount from your deposit and borrow more from your lender to accommodate the loss.

Either way, when planning to buy property, you should account for at least 10% of the value of the property you wish to buy to put towards a deposit (some lenders may only require 5%), stamp duty costs and other fees.

uno advisers are here to run you through all the fees and costs you’ll need to consider before buying property. Give us a call on 133 866 or create an account and chat to a uno adviser online to find out more.

uno is an online mortgage broker. The information above is general in nature, and you should always seek professional advice when making financial decisions.

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