When it comes to purchasing a property in New South Wales (NSW), one of the significant expenses that prospective buyers must consider is stamp duty. In NSW, stamp duty is a tax the state government imposes on certain transactions, including the purchase of a property. In this blog, we’ll explore whether you need to pay stamp duty on a new build property in NSW and what other costs you should consider when purchasing a new build property.

What is Stamp Duty?

Property purchases are subject to stamp duty, a tax levied by the state government. The stamp duty you must pay depends on various factors, such as the property’s value, whether it’s your first home, and whether you’re eligible for any concessions or exemptions.

In NSW, the rate of stamp duty ranges from 1.25% to 7% of the property’s purchase price. The rate is calculated based on the property’s value, with higher-priced properties incurring a higher rate of stamp duty. The stamp duty you must pay is typically calculated as a percentage of the property’s purchase price.

Are New Builds in NSW Subject to Stamp Duty?

If you’re purchasing a new build property in NSW, the answer is yes; you must pay stamp duty. The purchase transaction is still subject to stamp duty despite being a newly constructed property. The rate of stamp duty that you’ll need to pay depends on the property’s value.

First-time home buyers may qualify for stamp duty concessions or exemptions, which can reduce the amount of stamp duty you’ll have to pay. Additionally, if you purchase a new build property off-the-plan, you can defer the payment of stamp duty until the property is completed. This helps ease the financial burden of purchasing a new build property.

What Are Other Costs of Purchasing a New Build Property?

Stamp duty is only one of the expenses that you’ll need to consider when purchasing a new build property. Other costs may include;

• Legal fees: Engaging a solicitor or conveyancer to handle the legal aspects of the property purchase.
• Inspection costs: Arranging for building and pest inspections to be carried out before purchasing a new build property.
• Lenders mortgage insurance (LMI): Paying LMI to cover you against default on the loan if you borrow more than 80% of the property value.
• Conveyancing fees: Your solicitor or conveyancer will charge a fee for handling the transfer of ownership of the property.
• Building insurance: Arranging insurance to cover the property in case of damage or loss.

Ensure you include these costs in your budget when buying a new home. Understanding the costs allows you to avoid surprises and be financially prepared for the purchase.

Talk to us about your upcoming project at enquire@daradevelopments.com.au