When Is Stamp Duty Payable NSW
In NSW, stamp duty can be an expensive, and often unavoidable, upfront cost associated with buying a home. But there are times you may be entitled to a discount or even an exemption, particularly if you’re buying your first home. By the time you finish reading this page, you’ll know exactly When Is Stamp Duty Payable in NSW, what requirements you must meet before being entitled to a concession or exemption, and how much money you can save by using a free online Stamp Duty Calculator.
What is stamp duty?
If you’ve never owned a house before, the idea of NSW property stamp duty may be something you’ve never considered in-depth. For many first-time buyers, or people moving from a state with different exemptions, it’s critical to understand what NSW stamp duty entails. Transfer duty, also known as “stamp duty,” is a fee paid to the government when you acquire any type of property. There are a few special exemptions and reductions in stamp duty that you might qualify for. Continue reading to learn more about the conditions covered by these exemptions, as well as whether you meet them.
How much is stamp duty in NSW?
In NSW, stamp duty is charged based on the property’s sale price or current market value, whichever is greater. It’s calculated on a sliding scale similar to income tax, so the more expensive the house, the higher your stamp duty payment will be. These standard rates do not apply to all property purchases; rather, they are only for first-home buyers. Alternatively, you can use a stamp duty calculator to estimate the stamp duty you may need to pay on the property you want to purchase.
So, when is stamp duty payable?
Stamp duty is typically required to be paid at the time of:
- Completion of the Contract (also called settlement) or
- Three months from the date of exchange of Contract.
Therefore, if you purchase a property and the settlement period is longer than 3 months from the date of exchange, then you will be required to pay stamp duty prior to settlement of your purchase. If stamp duty is not paid on time, then interest is applied to the unpaid duty. In NSW, stamp duty must be paid within three months of settlement. If a property purchase is made ‘off the plan,’ stamp duty is payable within three months of the date of the completion of the agreement, or within three months of the assignment of the purchaser’s interest in the agreement.
How much is stamp duty in NSW?
Stamp duty in New South Wales is charged on the property’s sale price or current market value, whichever is greater. It’s calculated on a sliding scale comparable to income tax, so the more expensive your home is, the higher your stamp duty payment will be. Alternatively, you can use a stamp duty calculator to estimate the stamp duty you may need to pay on the property you want to purchase.
How do I avoid stamp duty in NSW?
In November 2020, the NSW government announced plans to phase out stamp duty in favour of an annual property tax. Following public consultation, the administration produced a progress paper as an update on the proposal. Stamp duty concessions and even exemptions are available for first-time homebuyers in certain situations.
How do I pay stamp duty?
Stamp duty is typically paid at settlement, so your conveyancer or solicitor can arrange for it to be paid on your behalf. Alternatively, you may pay stamp duty online. In certain cases if the settlement does not occur before the date for duty payment or if you want to pay the duty yourself or you don’t use a solicitor/conveyancer, you can use a cheque as a payment option.
How Falcon Advisory can help you.
If reading all of that information has left you even more confused than when you first started, you may be the perfect candidate for our services. We can help deal with all of your tax and stamp duty questions, so you can put your focus back on where it is needed most. We will do all the research and answer all of your questions as best we can then present you with a clear picture of how much stamp duty you need to pay – and if there’s any way you might manage to avoid it. Sometimes circumstances change, and we may be able to find a way around the stamp duty you owe.
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