Thinking about buying a property in South Australia? Don’t forget to factor in the cost of stamp duty. We’ve broken down how stamp duty is calculated for South Australian property buyers and how you might be able to save if any concessions or exemptions apply.
What is stamp duty?
Stamp duty is a one-off government tax that’s commonly imposed when you buy or acquire property. As stamp duty is charged by state and territory governments, the rules on how it’s calculated will vary from place to place. However, a general rule is: the more expensive your property is, the more stamp duty you’ll need to pay.
Stamp duty is primarily determined by three major factors:
- the state or territory you’re buying the property in,
- the value of the property, and
- whether you’re eligible for any concessions or exemptions.
Let’s take a look at how stamp duty is worked out in South Australia.
How is stamp duty calculated in South Australia?
In South Australia, stamp duty is worked out by applying the stamp duty rate, as set by RevenueSA, to your property’s market value or sale price, whichever of the two is higher. This means that even if you didn’t purchase the property – for example if it was given to you as a gift – you may still need to pay stamp duty based on the property’s market value.
If you’re a foreign purchaser acquiring an interest in residential land in South Australia, Revenue SA says it imposes an additional foreign ownership surcharge. At the time of writing, this is 7% of the value of the interest in the land.
Get an idea of how much stamp duty you’re likely to pay in South Australia with our Stamp Duty Calculator. Select SA from the dropdown menu to get started.
Who has to pay stamp duty in South Australia?
In South Australia, stamp duty is only payable when you buy or acquire residential land or primary production (farming) land, according to RevenueSA. It is generally the responsibility of the property buyer to pay stamp duty.
RevenueSA says that land is considered to be for ‘residential purposes’ even if it isn’t occupied but has undergone improvements that are “residential in character”, or if the land is vacant but is within a development zone where the purpose of the land would be envisaged as residential. Be sure to check with Revenue SA about how land you are considering might be classified.
RevenueSA says stamp duty applies to the transfer of property by investors as well as those intending to live in the property.
When is stamp duty paid in South Australia?
The South Australian Government advises that stamp duty is usually payable at or before settlement. Stamp duty must be paid in order for you to be registered as the owner of the property. If you fail to pay on time, RevenueSA says you may be charged with penalty tax and interest. This can be a significant amount – interest is charged at the market rate plus an additional 8% per annum. Meanwhile, penalty tax can climb up to 75% of the amount owing if you deliberately didn’t pay your tax or can be 25% in other cases, RevenueSA says.
Your solicitor or conveyancer may be able to assist you with completing and lodging stamp duty documents and advising you on key deadlines specific to your transaction.
Are there any stamp duty concessions in South Australia?
Unlike many other states and territories, South Australia currently offers no stamp duty concessions or exemptions for first home buyers. Additionally, since 1 July 2018, there is no concession or exemption for buyers who purchase property off-the-plan.
There is, however, a First Home Owner Grant, which eligible property buyers can apply for.
What are the exemptions to paying stamp duty in South Australia?
In some circumstances, you may be exempt from paying any stamp duty. According to RevenueSA, some of the instances where you’ll be exempt from paying stamp duty could include:
- Transfers from an estate of a deceased person to a beneficiary under a will
- Domestic partnership transfers
- Transfer of farming property between family members
Other fees and finance considerations when buying property in South Australia
On top of stamp duty, you’ll also generally need to pay a mortgage registration fee (if you’re buying with a home loan) and a transfer registration fee. The mortgage registration fee is a charge for registering a home loan and the property as security on that loan. The transfer registration fee covers the cost of transferring the title of the property. The South Australian Government sets the fees each financial year. The mortgage registration fee is charged as a flat fee of $176 in 2021/22, while the transfer registration fee is calculated based on the value of your property. The RevenueSA website provides details of fee updates.
An ongoing land tax may also apply to some property owners in South Australia, which RevenueSA says is based on the value of the land excluding buildings or other improvements.
If you’re purchasing a home in South Australia, don’t forget about solicitor/conveyancing fees, building and pest inspection fees, plus other upfront costs you might incur.
Explore further: Home Loan Fees And Extra Costs You Should Know About
First Home Owner Grant South Australia
If you’re buying or building a brand new home, you might be eligible to receive a $15,000 grant under the SA First Home Owner Grant. There are a number of eligibility criteria you must satisfy. Namely, you must be an Australian citizen or permanent resident, you or your partner cannot have held a relevant interest in an Australian residential property prior to 2000, and the market value of your property cannot exceed $575,000. Check with RevenueSA for more information.
Explore further: 2021 First Home Owners Grants & Concessions by State
Originally written by Tamika Seeto. Image Source: amophoto_au (Shutterstock.com)