Stamp duty is a tax that state and territory governments charge for processing certain ownership documents and transactions, such as the purchase of a new home. The value of the purchased property or land determines how much stamp duty you will pay – a general rule is the higher the property price, the more stamp duty you’ll pay.
The homebuyer is solely responsible for paying stamp duty – not the seller – and the payment process is managed by your settlement agent.
The rate of stamp duty varies, so it’s important to understand which rate is relevant to your property purchase. In Western Australia the following rates apply:
General rates apply to commercial and rural properties that are not being used as residential properties. They are also applicable to vacant land that doesn’t qualify for the residential rate.
Residential rates apply to places of residence, rental homes and land which will be built on within five years from the date of purchase. They are also applicable to mixed-use properties.
Commercial rates apply to owner-occupiers and Western Australian business assets where the value of the property is less than $200,000.
If eligible, first home buyers can take advantage of discounted stamp duty at the time of purchasing their home. The rates and offers available often change so it’s important to check the government websites or talk to your mortgage broker for the most up to date information.
As a first home buyer, you may also be eligible for a number of government grants. In WA, the First Homeowners Grant (FHOG) is currently $10,000 and only available on properties with a purchase price under $750,000. The grant is not available for the purchase of an established home or for renovations to an existing home.
This additional duty applies to acquisitions of residential property by foreign persons. This is currently 7%.
A reminder that there are other costs involved in buying a home besides stamp duty. Conveyancing, insurance, council rate adjustments, building and pest inspections, government registration fees, etc.
Get in touch with us to talk through all the costs associated so we can take advantage of any discounted rates and grants available for your situation.