Act now or wait until later… regardless if you are buying or selling you need to be across changes to stamp duty and state level Government grants.

Changes to stamp duty and state level grants will affect the timing of when you buy and sell property.  Make sure you are completely across the changes.

Stamp duty regulations and availability of grants related to property purchases changed across many of the states in the recently announced budgets, with the changes potentially having a significant effect on purchase costs associated with buying a property.

Any prospective purchaser, vendor and industry professional needs to have a firm understanding of how the rules are changing, what the dates are when the changes come into effect and how these changes may impact their purchase or sale timing.

For example, owner occupier buyers in Queensland who purchase a home prior to August 1st will save $6,575 in stamp duty based on the owner occupier concessions being scrapped after this date.

In South Australia both buyers and vendors needs to be aware that the first home buyers grant will start to be phased out in July 2012.  First time buyers purchasing before that time will be $4,000 better off.  Prospective vendors with a home that would appeal to first home buyers may consider listing the property well before the cut off when this market is likely to be more active.

NSW aside (they haven’t released their state budget yet for 2011/12), significant changes to stamp duties payable and grants available were made in Victoria, Queensland, South Australia, Tasmania and the Northern Territory.

As a quick rundown on some of the changes:

Victoria: – an initial 20% reduction in stamp duty for first home buyers which will increase over time. For settlement dates on or after 1 July 2011, land transfer duty rates will be reduced for eligible first home buyers purchasing their principal place of residence (PPR) valued up to $600,000. Land Transfer Duty will be reduced by 20 per cent on 1 July 2011, followed by additional 10 per cent cuts on 1 January 2013, 1 January 2014 and 1 September 2014, totalling a cumulative 50 per cent reduction for settlement dates on or after 1 September 2014.

Additionally, the first home bonus and regional bonus will be extended to 30 June 2012, providing first home buyers with a $13,000 bonus for newly constructed homes and an additional $6,500 if the new home purchase is in a regional location.

Queensland – owner occupier buyers not purchasing their first home will no longer receive a stamp duty concession after 31 July.  Prior to 31 July, an owner occupier purchase of a house for $350,000 will pay $3,500 in stamp duty; after this the rate payable will jump to $10,075.  If you are considering buying, it makes a great deal of financial sense to get in before the stamp duty rise kicks in.

New home buyers will benefit from a short term $10,000 ‘Queensland building boost grant’ which will be available on newly built homes purchased prior to the start of 2012.

The $7,000 first home owner’s grant remains in place.

Stamp duty rates have also changed, so make sure you check the latest tables here.

South Australia – there are no changes to stamp duty charges, but the state level First Home Buyers Grant will be phased out by July 1, 2013 starting with a halving of the grant on July 1, 2012.

Tasmania – there are no changes to stamp duty charges, but the concession available on land purchases for first home builders is no longer available.  The concession that was available to first home buyers for established dwellings has also been scrapped in the latest budget.

Northern Territory - there are no changes to stamp duty charges, but the NT Government has introduced a ‘BuildBonus’ providing a $10,000 incentive for purchasing or building a new home.  Note that the Northern Territory will maintain the concession available to first home buyers and owner occupier buyers.

Make sure you understand the rules around dates – do they relate to contract date or settlement date.  Also make sure you know where the cut offs lie as there are price limits applicable to stamp duty concessions and grants.

Getting a firm understanding of the ins and outs of state level transaction charges and benefits is essential to ensure you are maximizing the timing of your purchase or sale.

 

About Tim Lawless

Tim heads up the RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia

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12 Responses to Act now or wait until later… regardless if you are buying or selling you need to be across changes to stamp duty and state level Government grants.

  1. Mav July 3, 2011 at 6:43 pm #

    Tim, can you enlighten us on what is meant by “valuation dividend”. As noted by Macrobusiness blog, this phrase can be found in your latest press release.

    Also, can you explain the case of the missing charts?

    • Tim Lawless July 4, 2011 at 10:32 am #

      Hi Mav, valuation dividend is referring to the improvement in housing affordability – the phrase in context from the media release reads: ‘The softening in Australian home values is delivering a valuation dividend…’. Rismark, separate from RP Data, publish their dwelling price to disposable household income ratio which has now fallen to 4.2 times, its lowest level since June 2003.

      With regards to your second question, I’ve had to trawl through the Macrobusiness blog to see what you mean… it seems there is conspiracy theory that we have changed our reporting style to hide the slowdown in market conditions. The rpdata.com home page has been updated and part of the change has involved moving the monthly index table into a scrolling ticker. I suppose it comes down to opinion as the whether the ticker stats make it harder or easier to identify whether home values have gone up or down… any declines show up in red with a down arrow next to them and anything showing a value improvement is in black with an up arrow. I don’t think we can be more obvious than this and personally I think it is a much better way of showing the stats. If you prefer the old table, simply click on the link next to the ticker and you will see the table.

      The missing graph… well, we don’t use the same graphs each week and each media release we mix it up – like any media release we try to focus on different elements of the market and we only have a limited amount of space to work with, so we are limited to two graphs on each release. We publish the rolling annual graph in many other locations though – try the myrpdata.com site for starters where there is much more detail for each the capital cities (the graphs here are currently showing up to April, but will be updated today), I generally use these graphs in my youtube commentary each month and across any of the market presentations we undertake.

      The full set of tables for monthly, quarterly, year on year and year to date Index figures are published in the media release every month. Clearly we are not trying to hide anything and I find the suggestion that we are to be quite amusing to be honest. You can download the release from our website on the last working day – every month.

      • Mav July 4, 2011 at 3:34 pm #

        Thanks for responding. Much appreciated.

        About the charts, there isn’t no conspiracy theories here – just curious about the strange coincidence.

      • Tim Lawless July 4, 2011 at 3:36 pm #

        Fair enough, thanks for posting your comments, Tim

      • Leith July 4, 2011 at 3:55 pm #

        Hi Tim

        Can you please explain why RPData persists with a dwelling price to household disposable income ratio whereby the income measure (the denominator) includes owner-occupied imputed rents and compulsory superannuation contributions (amongst other items), neither of which are “disposable income” (i.e. available for current consumption). What would the ratio be with these items excluded from disposable income? In the interests of transparency, will future RPData releases include a ratio that excludes these non-disposable income items going forward?

        Regards Leith

      • Cameron Kusher July 4, 2011 at 4:11 pm #

        Hi Leith

        Unfortunately Tim isn’t here at the moment however, I can answer your question. As you may or may not realise, the RP Data-Rismark Home Value Index is a joint release between RP Data and Rismark and we are both separate entities. You will also note that the Dwelling Price to Household Income is a Rismark International product, it is not branded RP Data. When you have two businesses putting together a joint media release, neither one has total control over what is and is not included in the release. If comments referring to the dwelling price to index ratio are typically published in the release they are typically attributed to either Chris Joye or Ben Skillbeck of Rismark International however, this month they were not. If you have any questions about the methodology of the Dwelling Price to Household Income release they should be directed towards Rismark International.

        Cameron

  2. Scotty Gloodt August 23, 2011 at 9:07 pm #

    Solve the rent or own argument. Rent to own homes serve an important purpose in today’s gloomy economy: They provide people the chance to determine if they’d be better off as renters or homeowners.

  3. Gavin R. Putland October 9, 2011 at 11:51 am #

    Whatever the rules in your State or Territory, you can easily avoid stamp duty when you move house.

  4. StampDutyonLand October 22, 2011 at 2:12 pm #

    stamp duty is important in buying property but as far as possible it is more better if there will be no payment in stamp duty…lol

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