With property prices sky rocketing in most parts of Australia, one thing to be careful not to overlook is stamp duty. Stamp duty also referred to as ‘duty’ in Western Australia or ‘transfer duty’ in Tasmania, is a government tax paid upon the purchase of real estate property. With house prices at record highs the associated stamp duty can erode an enormous portion of your deposit and too often leaves buyers unable to purchase the property they want.
Buying a new home is one of thelargest purchase that most Australians will make and the sums changing hands means that the amount of stamp duty payable can be a problem. But what is stamp duty? It is tax revenue levied by states usually in the transfer of assets or property. As a guideline for those venturing into the Australian property market, buyers are always advised to budget for between 2.5% and 4% of the purchase price or $20,000 for a property worth $500,000 to cover the stamp duty.
Even though the stamp duty rates is high making it a barrier for many investors, one way to save on stamp duty is to shop for your dream home in New South Wales. Though Sydney is one of the world’s most expensive cities, a short trip north or south can lead to beautiful locations at a reasonable price. NSW is the most generous states when it comes to buying your first home. Their First Home – New Home Scheme provides eligible buyers with exemptions from transfer duty on new homes valued up to $550,000 and concessions for new homes valued between $550,000 and $650,000. To cut on costs, if you are first home buyer, then you may want to start your search for your dream home in NSW.