An advisor talking to a client about their first home purchase

Passing The Gatekeeper To Your First Home: Stamp Duty

An advisor talking to a client about their first home purchase
by
Claudia

Stamp duty is a tax imposed on certain transactions, including real estate. As a home buyer, it is the biggest upfront cost you’ll have to deal with on top of the purchase price of your new home. You pay stamp duty before settlement to the office of state revenue in the relevant state.

Because stamp duty is an upfront cost, it also can’t be covered by your home loan. The expense of stamp duty is often so high that it is a barrier for many first home buyers in being able to afford their first home. Fortunately, this barrier is recognised and there are various schemes available to help first home buyers manage or avoid the cost of stamp duty.

How Much is Stamp Duty?

Stamp duty rates are decided by individual state and territory governments. The rates in each area varies depending on demand. For example, you can expect it to be higher in metropolitan Sydney compared to regional NSW. The cost also varies depending on the purchase price, location of the property and whether you will be living in the property or not.

Who Has to Pay Stamp Duty?

Almost everyone has to pay stamp duty when purchasing property. However, some buyers may be entitled to a stamp duty exemption depending on where they live, whether they’re first home buyers and where the property they’re buying is located. For example, many states have abolished stamp duty for first home buyers purchasing properties valued up to a certain amount.

What Stamp Duty Concessions are Available?

Discounts and exemptions on stamp duty for first home buyers vary from state to state as below:

  • NSW - No stamp duty on property under $650,000. Discounted stamp duty on properties between $650,000-$800,000.
  • ACT - No stamp duty required from first home buyers as of 1 July 2019 when certain criteria are met.

Most incentives require buyers to live in the property for at least 12 months. If your partner has previously purchased a home, you are normally excluded from accessing these schemes.

Get in Touch With McDonald Jones Homes

When you build with us you have access to our exclusive in-house finance team at MyChoice Homes Loans who are an approved lender for the Australian Government's First Home Loan Deposit Scheme (FHLDS). MyChoice Homes Loans are construction loan specialists and are determined to assist First Home Buyers achieve their dream of new home ownership.

Read more about the First Home Loan Deposit Scheme here.

Use our stamp duty calculator to see how the additional costs will affect you. If you’re interested in finding out about financing your first home or want to look into some quality new builds, get in touch with McDonald Jones Homes. We provide quality homes for first home buyers throughout NSW and ACT and offer great valued full house and land packages. Explore our range of designs here.