So where's the catch? Changes to Stamp Duty...
In 2008/2009, the Queensland Treasurer, Mr Andrew Fraser, handed down the State Budget which outlined various changes to Stamp Duty associated with Queensland properties.
The intent of the new structure was to generally improve competitiveness with other States and assist First Home Owners with the affordability of buying their own homes.
While the budget had positive reductions in Stamp Duty for some home buyers and retirement village residents, there were however some changes made that resulted in an increase of transfer duty rates for transactions over $590,000.00.
What positive changes were made?
Concessions and exemptions for home buyers and retirement village residents:
1. Abolition of Mortgage Stamp Duty;
2. An increasing in the threshold for the firm home buyers duty exemption from $320,000.00 to $500,000.00;
3. An increase in the ceiling for the principal place of residence concession from $320,000.00 to $350,000.00; and
4. An extension of the principal place of residence concession to retirement village residents who adopt lease and sub-lease occupancy arrangements, which has never applied before.
When combined with the new duty rates, these concessions and exemptions reduced the duty payable on homes valued between $320,000.00 and $1,000,000.00.
So, where's the catch?
As the new rates lead to savings for transactions under $590,000.00, they have lead to increased rates of Stamp Duty for transactions over $590,000.00 , with the top marginal rates increasing from $4.50 to $5.25 per $100.00. ie. for a transaction of $750,000.00, Stamp Duty has risen from $26,225.00 to $26,775.00.
Current concession thresholds
The current concession thresholds for purchasing a property, are as follows:
The first home concession only applies to a home valued under $550,000.00 and can save you up to $15,925.00. **The home concession may still apply for a home valued over $550,000.00.
The home concession rate applies to the first $350,000.00 of the consideration or value of the residence, and the general transfer duty rates then apply to the balance.
The first home vacant land concession only applies to vacant land valued under $400,000 and can save you up to $7,175.
Stamp Duty is unavoidable, like all taxes, unless you are eligible for concession or exemption. For more information, click here.
Depending on the method in which you are buying a property, you may or may not entitled to a concession or exemption. This is particularly important information for first home buyer and home buyers, as the purchase price will affect how much of a concession, if at all, is available to a buyer.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication.
© Richard Hoare & Co Solicitors