Stamp Duty
A state based tax payable on the transfer of property, calculated as a percentage of the purchase price.
In detail
Stamp duty, technically called transfer duty in most states, is levied by state and territory governments on property transfers. Rates are tiered, with higher duty percentages applying to more expensive properties. Each jurisdiction has its own rate schedule, exemptions, and concessions.
First home buyers receive concessions or full exemptions in every state, though the thresholds vary significantly. In New South Wales first home buyers may be exempt up to a certain price and receive concessions on a sliding scale above that. In Victoria the thresholds and concession structures are different again. Investors and existing home owners pay full duty without concessions except in limited circumstances.
Why it matters for brokers
Stamp duty is often the largest single upfront cost after the deposit. Brokers who quote stamp duty accurately, including any concessions the client is eligible for, help clients understand the total funds needed to complete the purchase.
Example in practice
A first home buyer in New South Wales purchases a unit and asks the broker about stamp duty. The broker calculates the standard transfer duty using the current NSW rate schedule, then checks whether the client qualifies for a first home buyer concession. The concession saves the client thousands of dollars in upfront costs and the broker factors the correct amount into the funds to complete figure.
Related terms
First Home Owner Grant (FHOG)
A state or territory based cash grant paid to eligible first home buyers purchasing or building a new residential property.
Loan to Value Ratio (LVR)
The loan amount expressed as a percentage of the property value, used by lenders to assess risk on a home loan.
Guarantor Loan
A home loan where a family member provides their own property as additional security to support the borrower.
Lenders Mortgage Insurance (LMI)
An insurance premium charged to borrowers that protects the lender, not the borrower, if a high LVR loan goes into default.
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