Stamp duties are a tax that should never be forgotten about when you’re budgeting for a big purchase such as a car or mortgage. After all, if you don’t factor in the costs associated with stamp duty, you may quickly discover that your personal finances aren’t quite as sound as you had first anticipated them being.
The duty you wind up paying must be paid within thirty days of your purchase. As such, it’s crucial that you understand what factors wind up affecting how much stamp duty you’ll end up paying. While being a new home buyer or not is outside of your control as you look to purchase a home, there are a few controllable factors to keep in mind to lower the taxes you pay. Here are a few things to keep in mind about duties for homes as you shop around with your real estate agent.
What state are you buying a property in?
Depending on which state you purchase property in, you may have to pay more in stamp duties. For example, if you’re looking to purchase in Victoria, you’ll spend a lot more money than if you’re shopping for a home in Tasmania or Western Australia. It’s best to keep this in mind if you aren’t committed to buying a property in a particular state yet and are more interested in homeownership in general.
How do you plan on using your property?
While each state has its own tax rate, the purpose of your purchase may also affect the stamp duties collected by each state. A new homeowner purchasing their primary residence in New South Wales, for example, will pay the same amount of stamp duties as someone purchasing an investment property in the same state. However, if you’re purchasing an investment property in Queensland or Victoria, you’ll likely pay a higher stamp duty land tax in these areas than if you’re planning on living in the home permanently.
Ways to reduce your stamp duty.
If you’re looking to minimize the amount of stamp duty you pay, there are a few tips to keep in mind that can ultimately help reduce your overall costs. The easiest way to reduce how much you pay is by avoiding more expensive homes. Properties above $500,000 will generally increase the duty you expect to pay. Another way to lower your taxes is to buy in a different state if you can afford the commute or job relocation. If you’re only purchasing property, lowering the overall value of the home you construct on your plot of land can help you lower the amount of duty owed, too.
Ultimately, there’s a wide range of details that factor into how your stamp duty is calculated. For example, residential property in Northern Ireland may be calculated differently than someone shopping for a second home in New South Wales. If you want to have a better estimate surrounding what you may wind up paying when you purchase your home, a stamp duty calculator can be an incredible asset.
Stamp duty calculators help you take out the guesswork of finding out what your stamp duty will end up being, taking into consideration the numerous factors listed above. With easy-to-use interfaces, it’s possible to quickly and accurately calculate what your stamp duty will be based on, such as the value of the property and your total income. Best of all, some online stamp duty calculators will even alert you to stamp duty concessions or other homebuyers assistance programs that you may be eligible for, making it even easier to maximize your budget and financial peace of mind.