Strictly speaking, you don’t pay stamp duty on your home loan, you pay it as a tax on your property purchase. However, you’ll have to factor the cost of this duty into your calculations when you work out how much it’s all going to cost. The amount you’ll pay depends on a number of factors, such as which one of the states you’re in and whether you’re a first–time buyer or not. Use a mortgage calculator to work everything out so you’re prepared in advance. Using the calculator There are a few costs associated with buying a property that can surprise you, especially if you’re new to the game. Some costs are added to the home loan itself, but some are paid upfront and have a deadline. Stamp duty is one of the latter home loan charges that you’ll face, so it’s important to know how much you’ll need. Your stamp duty will vary according to how much the property you’re buying costs, as well as whether you’re in NSW or Queensland, for example. It also varies according to whether the property is a residence for you or an investment property. To use the InfoChoice stamp duty calculator, enter state where the property is located, the value of the property and the loan amount. Then select either “live in” or “investment” as a use for the property, a description of the property and whether you are a first time buyer or not. What is stamp duty? Stamp duty is a mandatory tax on home buyers levied by state governments. The payment of the tax is due by a certain date, which varies according to the territory or state the property is in. In NSW, for example, the stamp duty must be paid three months after the settlement date, whereas in QLD and Victoria, buyers have just 30 days to pay up. The payment goes to revenue office of the state the property is in. Is stamp duty the same as land transfer duty? Yes, it is the same, but land transfer duty explains the purpose of the tax a bit more. The tax is a singular payment for the transfer of the land the property is on from one owner to the next one. You might also see it referred to as transfer duty. How’s it calculated? Stamp duty changes by state or territory, with each region using its own sliding scale. At the end of the day, your stamp duty is worked out by working out the dutiable value of the property – which is usually the selling price. The lower the selling price, the lower your stamp duty will be. The percentage of the tax levied increases with the value of the property, though, so it’s not a linear increase – the more your new place is worth, the higher the stamp duty rate. What else affects stamp duty? It’s not just the state or territory and the dutiable value that counts when it comes to working out stamp duty; there are several other factors that you need to know about: If the property is given to a family member after death or divorce then there’s no stamp duty payable;there are a number of governmental first–time buyer grants and schemes available that can, up to a certain value, exempt first–time buyers from stamp duty;carers, pensioners and farmers can also apply for stamp duty concessions, according to territory laws;your residency can also affect the amount of stamp duty you pay, and. you’ll pay different amounts of stamp duty depending on whether your new property is an investment or your primary residence, with investment properties attracting higher duty. [Related Reading: What are HEM living expenses ? ] Does the property type affect the amount of stamp duty? There are also concession rates available for properties that are bought off a plan, as the value of the property is calculated only on the land value and is therefore reduced. This lowers the amount of duty payable. You may also pay less stamp duty if you buy a new property off–plan as the value is calculated by the land value and is therefore lower. Can my solicitor help me to understand my stamp duty? Yes, your conveyancer or solicitor can help and advise you with your stamp duty liabilities. As this tax can mount up to tens thousands of dollars, you need to understand it and be ready to pay it before the due date. Your solicitor can answer all your questions about the regional nature of your stamp duty, as well as inform you about any changes, concessions or exemptions that may apply to you. He or she can also take care of the paperwork that’s associated with stamp duty and make sure that the payment goes to the right revenue office. Handing this operation over to someone else makes life that little bit easier and makes sure that it’s done properly. What about the other fees, like mortgage registration and transfer fees? When you buy a property, the land on which the property is situated must be transferred into the new owner’s name (that means you) and this is done by submitting a Transfer of Land document. The transfer of the land ownership costs money and this fee varies according to the state or territory the property is in. Then there’s the mortgage registration fee. This is the legal document that assigns the home loan to the property, which secures it in the eyes of the lender. How can I make sure I’m not paying too much stamp duty? You won’t pay more stamp duty than you need to as the rates are set on a sliding scale. Of course, if you’re eligible for a concession or exemption then you should apply for it in order to reduce your eventual stamp duty payment. Your solicitor can help you here, although if you have a rough idea of how much you’ll be paying then you can save for it alongside your deposit. For many people, the stamp duty is paid out of the sale of their previous property, but for first-time buyers, this isn’t an option, which is why it’s important to find out about the government schemes and grants. The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.