No Stamp Duty on Building!
Building a house will save you thousands in Stamp Duty.
When you buy an existing home you will pay Stamp Duty on top of the purchase price. Stamp Duty is a land transfer tax that you are charged just to have the property transferred into your name. Stamp Duty is calculated on the value of the property at the time of the transfer.
When you choose to build, you are only transferring the value of the land. But when you purchase an existing property you are transferring the value of the land PLUS the house that sits upon it!
So how much Stamp Duty will I pay?
Your personal circumstances will determine how your Stamp Duty is calculated – whether you are buying the property for investment, first home owner, pensioner etc. For example sake, here are some calculations for Victoria Jan/Feb 2016 from the State Revenue Office Stamp Duty Calculator.
Purchasing an existing home for $450,000
First Home Owner: Stamp Duty Payable $9485
Previous Home Owner: $18,970
Keep in mind, Stamp duty charged on top of your purchase price – an often unwelcoming shock to home purchasers!
But the good news it, if you build a new home you only pay stamp duty on the block of land you buy, not the house. And this is where the excitement of saving by building begins.
Purchase a block of land for $150,000 and build a house on it for $300,000 ($450,000 overall spend)
First Home Owner: Stamp Duty Payable $1935 – Saving $7550
Previous Home Owner: $3,870- Saving $15,100
Investor: $4070- Saving $18,000
There are some stamp duty concessions available. For example, the pensioner duty exemption or concession to name one. You can learn about them all here
Stamp Duty savings are just one reason why building is your smart choice. If you’d like to learn more about all the advantages of building (there’s loads) visit our sister site Build in Oz. Discover how building can be easy, fun and a smart financial move.
-Nat Stevens – Build In Colac: 0407 889458, firstname.lastname@example.org