If you’re looking at purchasing a property in Queensland it’s important that you’re aware that the price of the property you are purchasing is not the final price that you will end up paying, as there are other costs and fees that must be added in order for settlement to occur.
One of these additional costs, and the most significant of them, is transfer duty, or stamp duty as it is referred to in many other states. It’s a good idea to have an estimate of how much stamp duty you will be liable to pay and take this into account when making an offer. Depending on your lender they may provide funds for its payment, or you may be required to pay it separately, so make sure you talk this over with your lender when taking out a mortgage.
Transfer duty is a tax imposed by the Queensland Government on the transfer or real property in Queensland. It applies whenever you purchase property, or transfer the ownership of property, amongst other things.
How Much Transfer Duty Must I Pay?
The amount of transfer duty that must be paid is generally calculated on the amount you agree to pay for the property, the contract amount, and this is termed the ‘dutiable value’.
Where you are gifted property and no money changes hands you must still pay transfer duty. In these circumstances it is calculated on the unencumbered value of the property, which must be supported by a valuation.
You can get an idea of much transfer duty you must pay by using the transfer duty estimator on the Office of State Revenue website.
Transfer Duty Concessions:
There are concessions available for the payment of stamp duty, which will result in you only being required to pay a reduced amount.
The full rate of transfer duty must be paid for an investment property, however if you will be living in the property as your principle place of residence then you can claim a home concession, which will reduce the amount required to be paid quite significantly.
Meanwhile if you are a first home buyer purchasing a property for less than $550,000.00 then you can claim the first home concession, in which case your liability will be reduced even further.
Let’s look at an example of an existing property that is being purchased for $540,000.00. If you were to purchase this property as an investment property you would be required to pay $17,325.00 in transfer duty. Meanwhile if you were purchasing the same property to live in you would be required to pay $10,150.00. While if you were a first home buyer you would only be required to pay $8,400.00.
Your lender will require stamped transfer documents at settlement in order to release the purchase funds to the seller.