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Understanding Stamp Duty on Home Purchases

April 13, 2012 | Comments: 0 | Views: 185

For most home purchases in Australia, you can expect to pay a stamp duty when you make the purchase. This home-purchase tax depends largely upon where your new home is located. Each state and territory has its own tax rates. And, each also has its own tax incentives for certain buyers. When planning for the purchase of a house, remember to budget for any tax amount owed as well as the purchase price and fees.

Avoiding Stamp Duty When Purchasing a Home

While stamp duty is a typical part of the home-buying process, it is by no means impossible to avoid. There are many cases in which a home buyer can be exempted from paying the tax on their new home. For a first time home buyer, it is possible to get a steep reduction in this tax if not avoid it completely. Most states and territories have first-time home buyer tax incentives that make it easier to afford a home purchase.

There are two states, however, that do not have any stamp duty concessions for home buyers. Tasmania ended its tax concessions programs in 2011. In South Australia, there are grants available for first-time buyers, but there are no tax concessions.

State and Territory Tax Concessions and Exemptions

In Victoria, some pensioners and holders of senior and concession cards are exempt from paying stamp duty. First-time buyers are given a 20% reduction in their tax owed for homes up to $600,000. Higher home-buying tax cuts are planned for the future.

In the Northern Territory, first-time buyers can receive as much as $26,730 off their tax payment. If the buyer is purchasing land for new home construction, and is not eligible for other tax reductions, there is a tax rebate available for as much as $3,500.

In the Australian Capital Territory, there are income-based first-time homebuyer stamp duty reductions available. An individual or couple must earn less than $120,000 annually to be eligible. For buyers with children, this limit is higher. For those who qualify, the tax can be as little as $20.

In Queensland, there are new-buyer savings of $8,750 for houses up to $510,000. For homes above that price, there are smaller concession amounts available. First-time buyers of vacant land for home construction are available for a different sliding scale of tax incentives.

In Western Australia, new home buyers can save as much as $17,765 on their taxes for homes valued up to $500,000. For homes between $500,000 and $600,000, there are reduced savings amounts. For land buyers, new buyers are exempt from paying the duty on land up to $300,000 with smaller reductions for land priced at $300,000 to $400,000.

In New South Wales, new home buyers can save as much as $17,990 on the duty. Buyers of land for a home can save up to $11,245.

Tomorrow Finance offers home loan comparison software to help people compare hundreds of home loans from Australia's lenders. Find out how much you can save simply by choosing a loan with the best home loan rates.

Source: EzineArticles
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