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Stamp Duty changes today mostly for the worse

FOR IMMEDIATE RELEASE: 1 July 2008
CONTACT: Peter Carter on 3210 3444

Stamp duty changes that came into force today and trumpeted in the recent Queensland budget as a big gain for home buyers will put most buyers in the property market in a worse or only a marginally better financial position, according to Queensland law firm Carter Capner Law.

"The only major beneficiaries are first-time home buyers and they won't get those benefits until September."

According to the July edition of the law firm’s Property and Conveyancing eNews published today to more than 1000 real estate agents in Queensland: “In those neighbourhoods where the average sale is in the band between $300,000 and $500,000, the benefit (except first-time buyers) is around $50 - insignificant in terms of the overall transaction. In locations where the average sale is around $800,000, the extra duty of $550 is a significant additional expense.”

"The general increases will make it harder for families wanting to upgrade to the highest quality homes and locations," says Peter Carter of Carter Capner Law.

First home buyers benefit from a higher exemption level. There is no stamp duty in respect of homes priced up to $350,000 for first-time buyers. The level increases to $500,000 from September 1. First-timers who buy homes priced higher than this from September get a reduced exemption that decreases to Nil at $549,000. If you buy a home priced at $550,000 or above, no exemption applies.

Owner-occupiers (other than first-timers) pay a flat 1% rate of stamp duty for the first $350,000 of the purchase price (up from $320,000) and at the higher rates referred to below for the component of the purchase price above that figure.

Stamp duty on non owner-occupied property ie investment and commercial properties, and on the non-concession component of higher-priced owner occupied homes, has dropped on homes priced up to $590,000 but increased significantly on higher-priced property.

“The biggest benefit is for very low priced buys. For example the duty on a $100,000 investment property in June was $2,350 and is now $1,925 – a saving of $425. But on a $300,000 investment property the duty of $8,925 yields only a saving of only $50”.

"The duty increase for higher-priced property is far greater than the reductions for ‘cheapies’. At $2 million for example, the extra duty is $8,200!"

Other examples are:

	old duty	new duty
$500,000	$15,975	$15,925
$600,000	$19,975	$20,025
$750,000	$26,225	$26,775
$1 million	$37,475	$38,175

Contracts dated before July 1 are still subject to the old duty rates.

"One bright spot for all property buyers," says Mr Carter "is that stamp duty on mortgages and loan transactions has been abolished. For example the duty of $860 previously payable on a $500,000 loan, is now nil".

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