Stamp duty (also known as ‘transfer duty’) is an often-forgotten cost associated with the purchase of property, but did you know that there are some concessions and exemptions available to eligible property owners to reduce the amount they would usually be required to pay?
In Queensland, you would normally be required to pay stamp duty any time you transfer land titles, which is typically any time a person buys a home or has their name added to a title.
Paying stamp duty is part of the legal process (also known as ‘conveyancing’) of purchasing property or becoming a property owner and the transfer will only be finalised once the duty has been paid. Stamp duty is not a fixed cost, and is scaled, calculated as a combination of a base rate and a percentage of the value of the property at the time of the transfer. The property value is determined through either the sale price or an independent valuation for instances where ownership is being transferred without a sale taking place.
Despite the hefty cost this can add to a property purchase there are some occasions where stamp duty is reduced, and it is useful to know when this applies as a concession or exemption that could save you a significant amount.
When do concessions apply?
If you are buying a home, you may be eligible for a concession. If the property is your Principle Place of Residence (PPOR) – not an investment property or a piece of commercial property – then the concession may apply.
First Home Buyers
First Home Buyers may be eligible for a complete waiver of their transfer duty. If the buyer’s first home is less than $500,000 they will be able to claim a first home concession that wipes the duty completely. If the home is worth more than $500,000 then the concession is tiered, but combined with the first home buyer’s rebate, there is still a substantial discount to be claimed.
The first home concessions should not be confused with the First Home Owners’ Grant, HomeBuilder grant, or the Regional home building boost grant, which are all separate schemes designed to help First Home Buyers enter the property market.
First Homes Vacant Land Concession
Eligible vacant land buyers may also be exempt from paying transfer duty when they combine the First Homes Vacant Land Concession with a further rebate available to them, as long as they are purchasing the vacant land to build their first home.
How do I apply for a stamp duty concession?
You must prove eligibility for a stamp duty concession by:
- Moving into the home with all of your personal belongings within one year after settlement; and
- Not disposing (i.e., selling, transferring, leasing, or granting exclusive possession) of the property (either in part or wholly) before you move into it.
These conditions remain in place for one year after you move in, and if you become ineligible you may only receive a part concession.
As well as being eligible, you will also need to submit supporting documents to make a claim for the exemption.
Are there any other stamp duty discounts available in Queensland?
Yes. Exemptions also exist. An exemption is different from a concession because it means you don’t pay any duty at all regardless of the value of the property. An exemption differs from a concession because a concession is merely a reduction of the amount of duty owing.
An exemption may apply if you are transferring part of the ownership of your home to your spouse or buying a mobile home.
If you are divorcing or separating and, as part of the financial settlement, the property will be transferred into just one person’s name, an exemption may also apply.
If you are considering purchasing a property or transferring ownership of a property and need help navigating a claim for a concession or exemption our experienced Mortgage Brokers can assist on 07 4052 0750.