Is stamp duty tax deductible?
Stamp duty is not tax deductible for individuals in Australia. This means that if you are an individual who has paid stamp duty on the purchase of a property or other asset, you cannot claim a tax deduction for the amount you paid. This rule applies regardless of whether the property is for personal use or for investment purposes.
However, if you are a first home buyer, you may be exempt from paying stamp duty depending on your state or territory, it’s a good idea to check which grants are available and whether you qualify.
How is stamp duty calculated?
In most states and territories in Australia, the amount of stamp duty payable is calculated on the market value or sale price of the property and the state or territory in which it is located, on a sliding scale similar to income tax.
For example, in New South Wales, the stamp duty rate for residential properties is:
Source: revenue NSW
Who is required to pay stamp duty?
Stamp duty is payable by the buyer or transferee of the property or shares that are subject to the tax. The seller or transferor is not typically responsible for paying stamp duty.
Where do I pay stamp duty?
Stamp duty is payable at the time of the transaction, and must be paid to the relevant state or territory government. This means that if you are involved in a transaction that is subject to stamp duty, you will need to contact the government of the state or territory where the transaction is taking place to find out how and where to pay the tax. For example, if you are purchasing a property in:
- New South Wales: You will need to pay stamp duty to the New South Wales Office of State Revenue.
- Victoria: You will need to stamp duty to the State Revenue Office of Victoria.
- Queensland: You will need to stamp duty to the Queensland Treasury.
- Western Australia: You will need to stamp duty to the Department of Finance.
What are the penalties for not paying stamp duty?
Failure to pay stamp duty in Australia can result in significant penalties and interest charges. If stamp duty is not paid on time, the government may impose a late payment penalty, which is typically calculated as a percentage of the unpaid tax. In addition, the government may also charge interest on the unpaid stamp duty, which accrues on a daily basis.
Some common penalties for failing to pay stamp duty in Australia include:
- Late payment penalties: If you fail to pay stamp duty on time, you may be subject to late payment penalties. These penalties are typically calculated as a percentage of the amount of stamp duty that is outstanding, and may be assessed on a daily or monthly basis.
- Interest charges: In addition to late payment penalties, you may also be required to pay interest charges on the outstanding amount of stamp duty. The interest rate that is applied will depend on the state or territory where the transaction took place, and may be based on the Reserve Bank of Australia's cash rate.
- Legal action: In some cases, the state or territory government may take legal action to recover the outstanding amount of stamp duty, including filing a lawsuit or placing a lien on the property that was purchased.
Get a Joust trusted partner broker to help you with your stamp duty, and your home loan.
Joust has a wide range of trusted partner mortgage brokers from all over Australia. This means they know the stamp duty laws specific to your state and can help you. To get in contact with a Joust partner broker you can use our the Joust concierge service. Or if you would like to get instantly matched with up to 3 partner brokers and see what competitive deals you get matched to, you can use Joust Instant Match.
*The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Joust recommends that you consider whether it is appropriate for your circumstances. Joust recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.
