The Law and You: deferred stamp duty
Posted on
In the ACT we pay stamp duty when we buy a property. For first home buyers this can be an ‘ouch factor’ because of the amount required. Indeed, stamp duty deters some first home buyers from proceeding with a purchase.
But did you know that there is a scheme that can help by allowing you to defer stamp duty? This offers benefits for some first time homeowners. Here are some essential facts and figures to consider:
Is anyone eligible for the Deferred Duty Scheme?
No. The scheme was introduced in October 1997 for first home buyers purchasing an established home worth $535,000 or below. It is not available for existing home owners or those who have bought a property before.
Do I need to live in the home to defer paying duty?
You must live in the home within 12 months of buying the property and you must live there for 12 consecutive months at a minimum.
How long can I defer the stamp duty for?
You can choose not to make any stamp duty payments for the first five years of owning your first home.
When do I have to pay the stamp duty?
You have to pay the stamp duty in full within 10 years or when you transfer the property to another owner if you sell the property.
Do I have to pay interest to the government?
Yes. You have to pay interest. The amount fluctuates. It is currently calculated at 2.59 per cent per annum.
How do I keep track of payments and the balance of what I owe?
You should keep you own, meticulous records. You can then compare your records to the statements the ACT Revenue Office issues each six months. These records outline the balance you owe and the prevailing interest rate.
What if I want to get ahead by paying off some of the stamp duty?
You can volunteer to make a payment at any time during the deferral period, but the amount you pay as a lump sum must be more than the monthly instalment amount you usually pay.
Tip
Make sure you talk to your lawyer in detail about the advantages of and conditions related to the Deferred Stamp Duty Scheme, so you are fully armed with the facts before making a final decision on whether to participate in the Scheme.
Image of hands holding a piggy bank and model house from www.shutterstock.com
Leave a Reply