Are you on top of the changes in stamp duty and government taxes?

Because changes to stamp duty and state level grants could affect the timing of when you buy and sell property, RP Data suggest that you make sure you are completely across the changes.

Stamp duty regulations and availability of grants related to property purchases changed across many of the states in the recently announced budgets, and the changes potentially having a significant effect on purchase costs associated with buying a property.

Prospective purchasers of both homes and property investments as well as sellers of property and should have an understanding of how the rules are changing, what the dates are when the changes come into effect and how these changes may impact their purchase or sale timing.

In a recent blog RP Data gave a quick rundown on some of the changes:

Victoria: – an initial 20% reduction in stamp duty for first home buyers which will increase over time.

For settlement dates on or after 1 July 2011, land transfer duty rates will be reduced for eligible first home buyers purchasing their principal place of residence (PPR) valued up to $600,000. Land Transfer Duty will be reduced by 20 per cent on 1 July 2011, followed by additional 10 per cent cuts on 1 January 2013, 1 January 2014 and 1 September 2014, totalling a cumulative 50 per cent reduction for settlement dates on or after 1 September 2014.

Additionally, the first home bonus and regional bonus will be extended to 30 June 2012, providing first home buyers with a $13,000 bonus for newly constructed homes and an additional $6,500 if the new home purchase is in a regional location.

Queensland – owner occupier buyers not purchasing their first home will no longer receive a stamp duty concession after 31 July.  Prior to 31 July, an owner occupier purchase of a house for $350,000 will pay $3,500 in stamp duty; after this the rate payable will jump to $10,075.  If you are considering buying, it makes a great deal of financial sense to get in before the stamp duty rise kicks in.

New home buyers will benefit from a short term $10,000 ‘Queensland building boost grant’ which will be available on newly built homes purchased prior to the start of 2012.

The $7,000 first home owner’s grant remains in place.

Stamp duty rates have also changed, so make sure you check the latest tables here.

South Australia – there are no changes to stamp duty charges, but the state level First Home Buyers Grant will be phased out by July 1, 2013 starting with a halving of the grant on July 1, 2012.

Tasmania – there are no changes to stamp duty charges, but the concession available on land purchases for first home builders is no longer available.  The concession that was available to first home buyers for established dwellings has also been scrapped in the latest budget.

Northern Territory – there are no changes to stamp duty charges, but the NT Government has introduced a ‘BuildBonus’ providing a $10,000 incentive for purchasing or building a new home.  Note that the Northern Territory will maintain the concession available to first home buyers and owner occupier buyers.

In their blog RP Data suggests you make sure you understand the rules around dates – do they relate to contract date or settlement date.  Also make sure you know where the cut offs lie as there are price limits applicable to stamp duty concessions and grants.

While some of these changes have a significant financial impact, as always property investors shouldn’t base their buying or selling decision on tax implications. It’s more about finding the right property in the right location at the right price and one that fits in with your long term investment strategy.

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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