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?
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).
Not sure about NSW but certainly with Vic investors pay more Stamp duty because of the PPOR concession
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 MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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).
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
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.
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.
Go to this link and it tells you what the stamp duty is for different states.
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 FinanceGraeme Freer | Freer Property and Finance
http://www.freerpropertyandfinance.com
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