Few people purchasing an ‘existing’ home are prepared for the shock that comes when they discover how much they have to pay on top of the purchase price, in stamp duty.
Stamp duty is a term used for land transfer duty. Put simply, it’s a tax that you pay to have a property transferred into your name. The amount you’ll pay is calculated as a percentage of the value or purchase price of the property.
However as author of Building Home and founder of Building Oz Natalie Stevens points out, stamp duty is not a problem if you build your home.
“You don’t pay stamp duty on your house when you build, you only pay it based on the value of the land, which ultimately saves you thousands of dollars,” Natalie says.
“It seems few people really get this whole stamp duty thing and how incredibly simple and legal it can be not to have to pay it on your home.”
You don’t pay stamp duty on your house when you build, you only pay it based on the value of the land, which ultimately saves you thousands of dollars.Natalie Stevens
When you build a home, you don’t pay stamp duty on the house, as no transfer is taking place. And this is where the big saving is.
This saving could mean the difference between you enjoying an alfresco dining area, a butler’s pantry or a major kitchen upgrade.
Your personal circumstances affect how much stamp duty you’ll pay, such as whether you’re buying a house to live in yourself, for investment, as a first home owner or as a pensioner.
“I have no idea why such a valuable benefit of building new homes is rarely discussed,” says Natalie. I can only assume that it is because people just don’t know.”
The amount of stamp duty you have to pay varies from state to state and, in some cases, is means-tested according to income and the number of dependent children you have.
Stamp duty is an additional cost, on top of the purchase price. You can calculate how much you'll pay in stamp duty by using a stamp duty calculator.
The money you save on paying stamp duty by choosing to build is considerable.
Would that make a difference to the way you spend your budget? Would it allow you to add some important features that significantly improve your family’s lifestyle?
Natalie’s guess is the answer is yes.