Forums / Property Investing / General Property / Stamp duty on mortgage vs Stamp duty on the purchase

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  • Profile photo of new2investnew2invest
    Participant
    @new2invest
    Join Date: 2010
    Post Count: 37

    What is the difference between Stamp Duty on Mortgage and Stamp Duty on Purchase?

    Scenario:
    IP – 400K
    Stamp Duty – 20K
    LMI – 10K
    conveyancing $1k

    In the above scenario, can I claim Stamp duty + LMI + Conveyancing?

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

    Stamp Duty on Mortgage is imposed by the bank (based on the loan).

    Stamp Duty on Purchase is imposed by the state (based on the price of the property).

    Yes you can claim. Stamp duty on purchase and conveyancing is added to your cost base when selling.

    LMI (I think) is deducted over 5 yrs (check this with your accountant).

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,366

    And Stamp Duty on mortgage is a “Borrowing Cost”, so can be reclaimed via Tax relief over (I think) 5 years – along with myriad other borrowing costs.

    Anything to do with having the loan happen is a borrowing cost – e.g. application fees, Stamp Duty on many bits and pieces, LMI, mortgagee’s Solicitors fees, searches, etc.

    Benny

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Nope

    Stamp duty is imposed by the State Government.
    There is stamp duty on many things such as transfer of land, mortgages, insurance contracts, LMI.

    Stamp duty on land transfer is the main one but there is also stamp duty on mortgages in some states such as NSW. However there is an exemption for a mortgage to purchase residential property, in NSW, where the purchaser is a natural person – ie not a company or trustee. A LOC set up on NSW would attact mortgage duty where the funds being borrowed were not immediately to be used for the purchase of property.

    There is also another stamp duty on LMI premiums, up to 10% in some states.

    Stamp duty on a mortgage would be a borrowing expense as would stamp duty on LMI.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    What is the difference between Stamp Duty on Mortgage and Stamp Duty on Purchase?

    Scenario:
    IP – 400K
    Stamp Duty – 20K
    LMI – 10K
    conveyancing $1k

    In the above scenario, can I claim Stamp duty + LMI + Conveyancing?

    You don’t actually mention stamp duty on the mortgage here.

    You could only claim LMI over 5 years.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    LMI is deductible over 5 years or the term of the loan whichever is the shorter.

    Stamp Duty on LMI can be upto 11% I hate to say if your living on SA.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of new2investnew2invest
    Participant
    @new2invest
    Join Date: 2010
    Post Count: 37

    Thank you all for the quick replies

    So to sum up.
    – Stamp duty charged by the state is NOT deductible
    – Stamp duty charged on mortgage or LMI is deductible over 5 years.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    – Stamp duty charged by the state is NOT deductible

    It is in Canberra :-)

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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