Stamp Duty is a tax imposed by the state government in instances where you are thinking of
purchasing an asset (something you own) some examples are:
- A new Property
- A new Car
- Land
Stamp duty may also be imposed on certain lease agreements and in instances when creating a trust
fund for your kids or whomever the trust may be entitled to.
Stamp duty is often a tax that people forget to take into account when considering purchasing a
property. If not calculated properly, when in the market for a new property, it could completely
change the amount that is required to purchase the property. The higher the value of the property
the higher the rate of stamp duty you will have to pay. Stamp duty is only required to be paid by
persons purchasing or investing in the property. Stamp duty doesn’t apply to those selling their
property.
Depending on the state, stamp duty may be required to be settled within a certain time from
purchase of real estate. The time frame provided for settlement is usually between 30 to 90 days
from the date of purchase.
Each state has different set of rules for how Stamp duty is calculated. For instance in NSW, if you
were to buy a property valued at $450,000 it would attract $16,000 worth of stamp duty. Whereas if
you were to buy a property in WA, within the same price range. You would only attract $4,500 worth
of stamp duty.
When purchasing a car, the rules for stamp duty also vary from state to state and can be quite
confusing for some who may not have knowledge of how stamp duty works
Most people are unaware of why stamp duty is a tax and can find it quite annoying as to why they
have to pay it. The stamp duty that you pay is collected by the state and territory government’s and
added into their annual budget. It is then invested back into sectors such as health, transport and
roads, police, justice and emergency services
If you are still unsure or have any queries regarding Stamp Duty on any of the issues stated above
and how stamp duty works, our qualified team at A One Accountants will be more than happy to
help clarify any concerns you have regarding your stamp duty needs.
With regards to stamp duty paid for investment properties, this is a capital investment and is added
to the cost base of the property and not deductible.