Some people buying their first home are very uninformed about the range of fees and charges, over and above the price of the home, that are involved with such a purchase. The concept of stamp duty can come as somewhat of a shock if they are unaware of its existence, and this can lead to a major hole in their budget. This is a cost that must be factored into any calculation of the capacity to borrow, and to find out about it after the fact causes major stress to the purchaser who must then find that additional money in time for settlement.
For the uninitiated, stamp duty or as it is now known, transfer duty, is a state government tax that is levied on documents that influence certain types of transactions under the provisions of the Duties Act 2001. Like any government legislation, there are rules set down that detail when transfer duty is payable, how it is calculated, and when it must be paid. Buyers are advised to always seek professional legal assistance when it comes to purchasing a property without prior knowledge about property conveyancing. However, here is some general information that may be of help:
When can Stamp Duty on Transfers be charged?
In most places, stamp duty is charged on documents produced and signed in that same place. However, it does not follow that documents taken to the border for purposes of signing and brought right back to the state will have uncharged stamp duty. There is another condition that prevents this activity. Stamp duty is also levied on documents that are signed outside a state or region that relate to a property, an action or other business within the state.
How Much Stamp Duty Is Payable?
In the case of a home purchase, this depends on whether the home will be the purchaser's principle place of residence or whether the purchase is for the purposes of investment such as a rental property. Calculations of a stamp duty is based on the property's value or on the consideration that has been paid.
When Is The Payment Made?
The purchaser pays the stamp duty to the solicitor who then arranges for the funds to the paid to the Office of State Revenue.
Are There Any Concessional Provisions?
There are concessional rates that can apply if certain eligibility criteria are met. The Office of State Revenue, or a solicitor, can advise if a transaction qualifies.
A lot of things can go wrong when it comes to the processing of legal matters that involve real estate transactions, as the established rules around stamp duty on transfers can be tricky. The best protection for someone purchasing property is to place the whole matter in the hands of conveyancing solicitors, whose legal knowledge and professional experience will make the transaction a positive experience.