All Topics / Help Needed! / Investing Interstate – Exaggerated Stamp duty ??

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  • Profile photo of GP_investorGP_investor
    Member
    @gp_investor
    Join Date: 2009
    Post Count: 6

    Hello All,

    I am planning to invest interstate however someone told me that I might be up for an exaggerated stamp duty as I am an interstate buyer. i.e. If stamp duty in NSW for a NSW resident is 4% of purchase price, I (Vic resident) might be up for, say 4.2%.  How true is that?

    Profile photo of LHLH
    Participant
    @lh
    Join Date: 2010
    Post Count: 97

    No, the stamp duty is based on the purchase price only and isn't affected by you being from Victoria.

    The only additional charge is on Commercial property where you might have to pay GST on the duty (although this should be mentioned in any special conditions of the contract).

    Profile photo of cmasoncmason
    Participant
    @cmason
    Join Date: 2009
    Post Count: 53

    Not sure about NSW but certainly with Vic investors pay more Stamp duty because of the PPOR concession

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    No, stamp duty should be the same where ever you are based. In some states, such as QLD, the rate is higher for non-owner occupied residences

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    If all else fails ie proof beyond doubt, visit the Office of State revenue website in the particular state (or speak to a conveyancer in the state just to sound them out).

    Profile photo of sonyasalsonyasal
    Member
    @sonyasal
    Join Date: 2008
    Post Count: 421

    you can also use the stamp duty calculator on the realestate.com website. One benefit of buying in a number of different states is avoiding paying land tax when land values exceed each states free threshold

    Profile photo of GP_investorGP_investor
    Member
    @gp_investor
    Join Date: 2009
    Post Count: 6

    Thank you all for your valuable insights.

    LH, would you then say that investing interstate can help you keep a check on the land tax costs.

    Profile photo of LHLH
    Participant
    @lh
    Join Date: 2010
    Post Count: 97

    For sure, the land tax is scalable based on the aggregated holdings you have. You'll also find that your structure will affect land taxes in certain states (eg: a company structure will be charged more in NSW so many companies have moved their storage facilities to QLD). Therefore many sophisticated investors share there holdings throughout the country.

    If however you are just starting to invest, then local holdings might be more comfortable for you. IMO, with smaller holdings the focus would be more about finding the property that can outperform the average with tax savings secondary.

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    Go to this link and it tells you what the stamp duty is for different states.

    http://www.acgol.com/stamp_duty_calculator.shtml

    Profile photo of Graeme FreerGraeme Freer
    Participant
    @freerenterprise
    Join Date: 2008
    Post Count: 47

    You would probably be aware that Victorians have up until recently enjoyed the unique privilege of stamp duty concessions for buying off-plan. ie. risk takers are rewarded as SD on completed property is the highest of all states & territories. Since July 1 new off-plan projects in NSW < $600k qualify for a SD waiver if completing by 30.6.2012 .
    Land tax becomes an issue more quickly if you are investing in houses due to comparitively greater land component over units, hence interstate diversification is sometimes used to avoid hitting threshold where tax is payable. NT doesn't have land tax at all.
    Graeme Freer
    Freer Property and Finance

    Graeme Freer | Freer Property and Finance
    http://www.freerpropertyandfinance.com
    Email Me | Phone Me

    Buyers Agent

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