Buying property in Australia leaves you liable to pay certain taxes, which you should be fully aware of prior to going ahead with any real estate purchase. If you are a first-time buyer, here are some important taxation factors to take into account when buying a property.
Stamp duty is a state tax levied on every real estate purchase, and it is a one-off payment that you need to factor into the equation. The amount you will pay depends on the property price, the location and the type of home loan you take out.
A quick search on Google will lead you to websites with a useful stamp duty calculator for Queensland home buyers, which will help you to crunch the numbers. You will be able to decide whether or not you can afford to make the purchase.
Sourcing A Good Conveyancing Solicitor
This is an essential step, as the legal expert can advise you on the necessary preparations you will have to make, while also ensuring that the property is not subject to special conditions and there are no outstanding debts connected to the property. Ideally, you want a company that is local, and one that is well-established and has a fixed fee for their services.
Capital Gains Tax
This only applies when you sell a property, and the tax paid will depend on how much profit you have made. This will not affect you if you are a first-time buyer, yet when the time comes to sell and move on, you might be liable for capital gains tax, which is something a conveyancing solicitor can determine. If you are a foreign resident, the government website should give you more information concerning taxation liabilities.
Other Essential Costs
Aside from stamp duty, there will be other costs incurred when you purchase property, such as:
- Conveyancing costs – These should be fixed according to the sale price.
- Removal costs
- Furnishing the property
- Property insurance – The home loan lender will insist that you take out adequate insurance to cover their liability.
Every property is liable for council fees, which would depend on where the property is located and is based on current land value prices. The fees cover local services and area maintenance, and you should factor these costs into the total price you will have to pay.
First Time Buyer Grants
Some states will offer the first-time buyer concessions with stamp duty, which can vary from state to state. This is something your conveyancing lawyer can help you with. Whether you qualify would depend on the value of the property and the type of mortgage you are taking out.
The process of buying real estate in Australia is quite straightforward, and providing you engage the services of a competent conveyancing solicitor, everything would be handled by the legal expert, who would ensure that you are fully aware of your tax liabilities, and also that the property is free from outstanding debt and has no restrictions.
Buying real estate is a milestone in every person’s life and with the right legal advice, it should be a straightforward procedure.