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Stamp Duty Explained

When purchasing real estate, in addition to professional fees and disbursements, a purchaser must pay the state government tax commonly known as stamp duty. Stamp duty is state based with no two states having identical frameworks.

The amount of stamp duty payable will vary depending on the purchase price - the greater the purchase price the greater the stamp duty.

Every business, property or commercial transaction where you are acquiring an interest in an asset raises the prospect of stamp duty as an extra cost in the transaction. 

From a practical point of view in relation to the purchase of property, stamp duty is payable to the Office of State Revenue (OSR) prior to lodging the Transfer of Land at the Land Titles Office.

In many cases, the buyer’s financier will pay the stamp duty amount at settlement, with the funds from the loan amount. Where there is no lender involved, the purchaser will be required to pay the stamp duty by way of cheque prior to settlement. This is usually handled by the purchaser’s solicitor who will use the cheque to pay the OSR.

You should carefully consider the financial impact of stamp duty before entering into any contract for the purchase of an asset.

If you are purchasing property and would like to know how much stamp duty you will be required to pay, visit the State Revenue Office Property Transfer Duty Calculator http://tinyurl.com/7ma5pdc  

If you have any queries or require any assistance in relation to stamp duty, please contact us on 03 6332 9353.

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