Is There A Way Past Stamp Duty? Not Likely.

Unless you have benefitted from a matrimonial home via the Family Law Act or gained through a gift in Will, you will be at the receiving end of the Stamp Duty storm. Property taxes are pretty high for Australia when compared to other developed countries, suggests Anthony Keane for the website news.com.au

Among the various property taxes, stamp duties are perhaps the most difficult to avoid. A property worth $100,000 is valued at A$ 111,000. Such a property attracts a stamp duty of 3.5% in Australia.

Duties a lot steeper than other developed nations

This is fairly steep when you compare it to the USA or Canada where 1% is the norm for such properties.

Keane points out that Australian property buyers are hit the hardest if you leave alone Indian, Spanish and British buyers.

Stamp Duty is government’s blue-eyed baby

Stamp duty has singlehandedly contributed in excess of $1.2 billion to the government exchequer for the taxation year 2011-2012- one reason why the Federal government is in no hurry to alter the tax structure.

Interstate migration does not reduce stamp duty pressure

People can seek to reduce other taxes by strategically moving to other states. This though is not the case for stamp duties, which remain more or less the same. The only exception to the rule is Queensland where the ‘duty’ is nowhere near the national average.

You can read the original article here.

In my opinion, it is truly difficult to reduce stamp duties at the moment. They may increase in coming times, if anything. Having said this, each trap offers a vent and taxes like stamp duties offer few exit routes as well.

• If you buy a land and build on it later, you will only have to pay stamp duty on land.
• You can avail concessions if it is your first home.
• You can also choose to buy your first home with someone for whom it is not the first property purchase. In the event you will fetch concessions on your plot of land provided that the total acreage (his and yours combined) does not cross the limit for Principal Place of Residence (as confirmed by your State).
• You can avail concessions in the event of moving into a home, less than a year from the date of contract settlement.

Nothing however will serve better than the government’s alacrity in changing the property tax structure.