When purchasing a home, it is important to remember a little thing called stamp duty. It is often forgotten and not factored into the budget of a first home buyer, but can add up when you’re spending a significant amount on your home. However, first home buyers can have their stamp duty waived as part of a government scheme that enables first home buyers to acquire their first property, which is known as the First Home Owners Rate (FHOR) of duty.
Who’s Eligible for the FHOR of Duty?
In general, if you are qualified for a First Home Owner Grant (including those who were not receiving the first home owner grant funds because they bought an established home instead of a new one), then you are eligible.
How Much Stamp Duty Do I Have to Pay?
There are thresholds that determine how much stamp duty you will be required to pay. These are as follows:
- Property value that’s $430,000 or less. You won’t be required to pay any duty at this threshold (as at 3 July 2014).
- Property value above $430,000 but does not exceed $530,000. The rate of duty will be $19.19 for every $100 or part of $100 by which the dutiable value exceeds $430,000.
- Property value that exceeds $530,000. You won’t be eligible to avail any of the FHOR of duty.
However, if you are buying a vacant land, the property’s value of the property must be $400,000 or less. Otherwise, you may not be eligible to take advantage of the FHOR of duty. If the vacant land is worth $300,000 or less, you don’t pay any duties. If its value is anywhere between $300,000-$400,000, the rate will be $13.01 for every $100, or part of $100, by which the dutiable value exceeds $300,000.
How to Apply for the FHOR of Duty
To apply for the FHOR of duty, you must first lodge an application for the grant and/or FHOR pre-approval through the Office of State Revenue or an approved financial institution. If you’re eligible, you’ll receive an approval letter from the Office of State Revenue along with the FHOR of duty application form. From there, you must submit the transaction record along with the signed and completed form to the Office of State Revenue or through a settlement agent.
If you would like assistance in determining your FHOR of duty or would like to discuss other costs involved in purchasing your first home, give us a call today and book an appointment with one of our experienced brokers who will answer any questions you may have.