When Is Transfer Duty Payable On Your House?
The government charges Transfer Duty (what used to be called Stamp Duty) on every real estate transaction.
Depending on whether you are a first home buyer, intending to use the property as your principal place of residence or as an investor and how much you are paying for your property will determine the rate and amount of Transfer Duty that you will pay.
The Office of State Revenue is the department which oversees the payment and collection of Transfer Duty. You can visit their website www.osr.qld.gov.au for more information.
The thing which can catch a lot of people out is that Transfer Duty is payable on the date of settlement (if you are using a bank) or 30-day from the date the Contract of Sale becomes unconditional (whichever is the first to occur).
This can create problems for clients who do not have a standard “30-day settlement” Contract. Where a buyer’s contract provides for settlement in 60, 90 or sometimes 120 days rather than the stock standard 30 days then a buyer can get caught out because whilst unconditional, the contract does not settle for a further month or longer. In that situation, Stamp Duty is payable well before settlement and if it is not paid, Unpaid Tax Interest (UTI) is then charged on top of the Transfer Duty payable, until payment is made.
For a lot of buyers, their bank is advancing all monies towards the purchase or they simply do not have the amount of Transfer Duty on hand to pay.
So, when next purchasing a property make sure you understand how much and when your Transfer Duty is payable.