About to take the plunge in buying a house or apartment? Even thinking about it can make your hair curl, and then there’s a little thing the government like to call stamp duty! With the government’s stamp duty exemption on purchases of new homes coming to an end next month, we’ve got the top five ways to save on your stamp duty – now!
by Anna McDougall, the Money Maven
So what is stamp duty and why do we pay it?
Stamp duty is a tax levied upon the sale of shares and property to cover the cost of the legal documents of such transactions, and while there is no more literal stamping of documents, it’s a tax we just can’t escape!
Stamp duty rates vary from state to state in Australia and is added to all State Governments’ respective budgets, and primarily this revenue is to be used for Health, Transport & Roads, Police, Justice & Emergency Services, Education & Training, Human Services, and Environment, Climate Change & Water.
Good news for South Australian residents though, just this week South Australian Government announced it will ease stamp duty in a bid to boost the number of city residents in Adelaide. Under the two-year trial, stamp duty will be abolished for people who buy an apartment off the plan for under $500,000.
Buying property ‘off the plan’ is when you you effectively enter the contract of sale before construction of a building on the property has been completed.
So have you been thinking about taking the next step toward maturity by purchasing a piece of property?
Well, come June 30, the government’s stamp duty exemption on purchases of new homes, which currently offers savings of up to $22,000, will end. This means smart buyers need to act quickly to take advantage of the significant savings currently on offer.
Before you sign on the dotted line and pick up the keys to your brand new home, all while counting the savings you incurred.
You can calculate your estimated stamp duty costs at stampdutycalculator.com.au
Dominic Sullivan, General Manager of leading residential developer Payce, advises the best way to help purchasers take advantage of this unbeatable offer.
1. Get the right price – to take advantage of the stamp duty exemption the property you pick must be under $600,000
2. New homes are the go – the stamp duty exemption is only available on homes that are not yet under construction, and are purchased off the plan
3. Act now – a stamp duty exemption will mean a saving of $22,000 – but there is only one more month until this opportunity ends. Contracts must be exchanged by July 1st, 2012
4. Investigate further savings – grants of $7,000 are currently available for first home buyers and many developers are offering additional incentives including cash back savings to sweeten the deal. For example East Village is offering an additional $5,000 incentive to purchasers. Shop around for the best deals before deciding on your property – it could save you thousands!
5. Do your research – captilise further on your savings by making sure the property you purchase is in an area with good investment potential, is well serviced by public transport and that the developer of your home is reputable by looking at their previous developments. This will ensure the value of your property is set to increase over time.
