Stamp duty is a tax charged by State and Territory governments on the purchase of property. The amount of duty charged will depend on the State government’s formula and the sale price. There are usually concessions for first-home buyers, ranging from discounts to extended payment periods. A good rule of thumb is to tuck away an extra five per cent on your deposit to cover stamp duty, plus some additional purchase costs.
You should check whether your State charges mortgage stamp duty on your loan amount, or whether you qualify for any subsidy, grant, or exclusion category. Your mortgage product will determine if you’re able to borrow the Stamp Duty fee.
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The Origin of Stamp Duty
Stamp duty is an archaic tax that is inherited from an era when ‘stamping’ of documents (in wax or with a physical stamp) were required to make them official. The duty is thought to have originated in Venice in 1604 before making its way into other countries looking to tax various types of transactions. From Wikipedia, “Stamp duty was first introduced in England on 28 June 1694, during the reign of William III and Mary II, under “An act for granting to their Majesties several duties upon vellum, parchment and paper, for four years, towards carrying on the war against France”. In the 1702/03 financial year 3,932,933 stamps were embossed in England for a total value of £91,206.10s.4d. Stamp duty was so successful that it continues to this day through a series of Stamp Acts.”
Since we inherited our legal system and that of Government from the antiquated UK model, we also natively applied stamp duty in the same way. Over time, the duty has continued to deliver Government revenue so they’ve made up all sorts of reasons why it should remain, but in essence, it is the shadow of a greedy Government in Venus from over 400-years ago.
Many have argued over the years that a Stamp Duty should be replaced by a broader definition of the existing and supplemental Land Tax. The Government is progressively making land tax an options – at least in principal – so it’s only a matter of time before the system enjoys some measure of reform.
Stamp Duty is Complex
Each state has its own Stamp Duty requirement, with various exceptions, scalar obligations, and grans that may apply. We encourage you to call us for an accurate appreciation of what value of Stamp Duty you might expect to pay.