When buying your first home in Western Australia, stamp duty (or transfer duty) is one of the biggest upfront costs. Thankfully, WA offers generous exemptions and concessions specifically for first-home buyers, significantly reducing this financial burden.
Here’s your detailed guide to understanding how these stamp duty benefits work and how to take advantage of them.
What is stamp duty?
Stamp duty is a tax payable when purchasing property. The amount varies depending on the property’s value and type, making it one of the largest upfront costs for homebuyers.
For first-home buyers in WA, exemptions and concessions are available to make buying a home more affordable.
Stamp duty exemptions and concessions for first-home buyers
1. Full stamp duty exemption
If you’re buying your first home in WA and the property’s value is $430,000 or less, you qualify for a full exemption from stamp duty, meaning you pay nothing.
2. Partial stamp duty concession
For homes valued between $430,001 and $530,000, you’ll receive a discounted stamp duty rate, reducing the overall cost.
3. Vacant land exemptions
If you’re buying vacant land to build your first home, you may qualify for:
- Full exemption if the land value is $300,000 or less.
- Concessional rates for land valued between $300,001 and $400,000.
Shared equity arrangements
If you are purchasing a property under a shared equity scheme—such as through Keystart’s Shared Ownership program—you may still qualify for stamp duty exemptions or concessions.
For example, if you purchase 70% of a $400,000 home through a shared equity arrangement, the stamp duty will be calculated only on your share of the property’s value. This can significantly lower your upfront costs.
Make sure to confirm the specific eligibility criteria for shared equity arrangements as they may vary depending on the program.
Foreign transfer duty
Foreign buyers should be aware that additional foreign transfer duty may apply.
This surcharge is currently set at 7% of the property’s value for non-citizens or non-permanent residents.
For example, if a foreign buyer purchases a $500,000 property, an additional $35,000 foreign transfer duty would be payable, on top of regular stamp duty costs.
If the property is being purchased jointly and one buyer is a foreign person, the surcharge will apply proportionally to their share.
For instance, if a foreign buyer and an Australian citizen are jointly purchasing a $500,000 property, the surcharge will apply to the foreign buyer’s 50% share ($250,000).
It’s essential to understand these additional costs and factor them into your budget when buying property in WA.
Eligibility criteria for stamp duty exemptions
To qualify for these benefits, you must meet the following criteria:
- First-Time Buyer: You and your spouse (if applicable) must not have previously owned residential property in Australia.
- Australian Residency: At least one applicant must be an Australian citizen or permanent resident.
- Intended Residence: The home must be your primary place of residence for at least six consecutive months, starting within 12 months of settlement or building completion.
How to apply for a stamp duty exemption or concession
Applying for a stamp duty exemption is typically handled during the property transfer process. Here’s how it works:
- Notify Your Conveyancer or Settlement Agent: Let your settlement agent know you’re a first-home buyer eligible for stamp duty benefits.
- Complete the Required Forms: Your settlement agent will lodge the necessary forms with the WA Department of Finance on your behalf.
- Provide Supporting Documents: Ensure you have:
- Proof of identity
- A signed contract of sale
- Other documents requested by the Department of Finance
Your agent will ensure everything is submitted correctly to avoid delays.
Why stamp duty exemptions matter
Stamp duty exemptions and concessions can save first-home buyers in WA tens of thousands of dollars. For example:
- On a $400,000 property, you’ll save approximately $13,500 in stamp duty through a full exemption.
- On a $480,000 property, a concessional rate applies, saving you thousands compared to standard rates.
These savings make a big difference in reducing upfront costs and help you direct more funds toward your deposit or other expenses.
Common questions about stamp duty in WA
Q: Do I qualify for a stamp duty exemption if I buy a second-hand home?
A: Yes, as long as the property is your first home and its value is within the eligible thresholds.
Q: Can I combine the stamp duty exemption with the First Home Owner Grant (FHOG)?
A: Absolutely! These benefits are designed to work together, maximizing your savings.
Q: What happens if I don’t live in the home for six months?
A: You may need to repay the stamp duty savings if you fail to meet the residency requirement.
Q: Does foreign transfer duty apply to first-home buyers?
A: Foreign buyers may still be liable for foreign transfer duty in addition to regular stamp duty. Ensure you understand your obligations if one or more buyers are not Australian citizens or permanent residents.
Q: How do shared equity arrangements affect stamp duty?
A: Stamp duty is calculated based on your share of the property’s value in a shared equity arrangement, potentially reducing your upfront costs significantly.
Taking the next step
Understanding stamp duty exemptions in WA can save you thousands and make homeownership more achievable.
If you’re ready to explore your options, get in touch with us today. We’ll connect you with a dedicated mortgage broker who can guide you through the process and help you secure all the benefits you’re entitled to.
