Key Insights

• Stamp duty is a government tax paid when purchasing a property, based on its value. While it can add up, especially for higher-priced properties, there are concessions and exemptions, particularly for first home buyers and those building.
• It is calculated by subtracting any applicable grants from the property’s purchase price, then multiplying by the duty rate. It’s an upfront cost paid alongside your deposit, and banks settle the payment after the property is yours.
• First home buyers enjoy substantial benefits, with potential exemptions and concessions based on property value and eligibility for grants.

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So you’re thinking of buying a home, and so far it’s been fun! You’ve looked at home designs, walked through areas you’d like to live, found the local coffee shop, but now you made it to the point where it’s all taxes and banker language.

Well… don’t let your eyes glaze over yet! We at Easystart have gathered all questions and answers and going to give you the rundown on one of the biggest costs of buying a home in Western Australia; stamp duty.

That means in a few short minutes, you’ll better understand what it is, why you pay it, when to pay it and how you can reduce it or maybe even avoid it altogether!

So without further ado! Let’s dive in to all things stamp duty and cover all your burning questions 🔥 .

 

 

 

So, what is Stamp Duty?

Put simply, stamp duty is a government tax that you have to pay when you buy a house. It’s based on the market value (the price you paid or expect to pay) of the land or property that you are buying and the more you spend, the more tax you’ll pay.

Home buyers in WA can pay tens of thousands of dollars in stamp duty. That’s on top of the mortgage, deposit, building inspections and settlement fees! Arghhh, right? 😩

The good news is, there are concessional rates that reduce or even eliminate stamp duty, particularly if you’re a first home buyer. Win!

Plus if you choose to build, you only pay stamp duty on the land which can save you thousands. Win-win!

 

How much stamp duty am I expected to pay?

When it comes to stamp duty in Western Australia, the amount you pay comes down to the purchase price of the property, if you are looking for a quick estimate you can use this little formula below.

Stamp Duty = (Purchase Price of Your Home – First Home Owner Grant) x Duty Rate

First Home Owner Grant: If you’re a first home buyer, you may be eligible for a First Home Owner Grant of up to $10,000.

Duty Rate: The duty rate is determined by the purchase price of the property. Your rate of duty will either fall under a general rate, a concessional rate, or a first home owner rate depending on your circumstances. For general rates of duty, It can be anywhere from 1.9% for houses under 120k all the way to around 9% for houses over 725k. You can find more information on rates of duty here.

Just remember, that this is just an estimate! we recommend using the WA governments transfer duty calculator . This will give you the most accurate estimate of what you can expect to pay.

 

Why do we pay Stamp Duty?

Stamp duty covers the cost to the WA Government of changing the property documents. The revenue is added into the state government budgets. Many people feel stamp duty tax is outdated and creates yet another barrier to home ownership. Luckily, there are some ways to lower the amount or get it around it completely!

 

Who pays Stamp Duty?

That would be you – the home buyer. The amount of stamp duty you’ll need to pay is calculated on the value of the property. If you want to work the exact amount of stamp duty you might be up for, check out this handy calculator. 👉STAMP DUTY CALCULATOR

 

How is Stamp Duty Paid?

Stamp duty is an upfront cost that is paid on top of your deposit. You’ll need to factor in stamp duty when buying a house as it could mean saving even more money to cover off your deposit AND the stamp duty 😦

Ultimately, the actual payment of stamp duty is actioned by the bank or lender after settlement from funds the buyer provided prior to settlement.

Our hot tip 🔥: Make sure you budget for stamp duty on top of your deposit, mortgage, building inspection and settlement fees so you are not caught out.

 

 

Whatever you do, do NOT “forget to pay it”

Stamp duty is an essential part of buying a home, and as the person lodging and paying, you are liable for duty. It could even cost you a late payment penalty tax. 

You must pay before any certificate of duty (your receipt of payment for stamp duty) can be issued. Without that, you won’t be able to move forward in the home buying process 👎.

The payment is due within one month of a duties assessment notice (The bill from the Western Australian government that tells you how much stamp duty you owe), you can find more on when and how to pay stamp duty here.

 

Can stamp duty just be added onto my loan?

No 😞. In practice, stamp duty comes out of your cash deposit while the loan amount will increase to compensate.

 

How can stamp duty be reduced?

• A lower house price means less stamp duty to pay.
  • One way to reduce stamp duty is to negotiate the sale price of the property with the seller.
• Buy off the plan (before the property is built or completed)
  • If you build a home, you’ll only have to pay on the expected value of the home once completed which is often heavily discounted from the market value. If you can find a well-priced block, you’ll be saving yourself thousands in stamp duty!

• Take advantage of government incentives!
  • For first home buyers, there is a concession on stamp duty for a property worth more than $430,000 but less than $530,000. (See more on this below!)

• Transferring property between family?
  • You may be eligible for a stamp duty exemption! Look into exemptions for transfer between family members.
• Consult a financial advisor!
  • A financial advisor can help you navigate the confusing world of stamps and duties. At the end of the day, stamp duty is a big cost, you want to make sure you are not paying anything you are not required to.

 

Did you know that first home buyers can avoid paying stamp duty all together!

Here’s a big win: In WA, you won’t need to pay stamp duty if you’re a first-time buyer and the house you want to buy is under $430,000 (Woohoo!).

 

 

Is there any other help for first home buyers? 🏠

If you’re a first homebuyer you get a little extra help from the WA Government known as first home owner rate (FHOR). Here are the facts:

• First home buyers don’t pay stamp duty on any home purchased up to the value of $430,000.
• Homes between the sale value of $430,000 and $530,000 receive concessions (reduced stamp duty).
• First home buyers don’t pay stamp duty on land purchased up to the value of $300,000.
• Land between the sale value of $300,000 and $400,000 receives concessions (reduced stamp duty).
• You must be eligible for the FHOG for this to apply – check here! 

We have a list of the different Government grants & schemes here.

For the most up-to-date info on stamp duty and current concession rates, always visit the WA Government website.

 

So let’s summarise!

• Stamp duty is the West Australian’s governments tax on buying a home in our great state.
• As the person buying the home, you are are the person responsible for paying it.
• The payment of stamp duty is done at the time of settlement.
• How much stamp duty you pay is based on the market value of your home (minus any first home owner grants) and multiplied by the  rate of duty, with the rate of duty being anywhere from around 1.9% to 9% of the market value of the home you wish to buy.
• You can save big on stamp duty by taking advantage of concessional rates or government grants.
• You might be able to completely avoid stamp duty all together if you are an eligible first home buyer!
• Whatever you do, do not forget to pay it, or you could be up for a late penalty tax!

That’s about it! We know it’s all pretty complicated, but trust us when we say, it’s all worth it in the end!