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Segments of Property Valuation

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What is stamp duty?

When you buy a home, you’ll need to pay what’s known as STAMP DUTY (also called transfer duty).

Essentially, it’s a tax charged by state and territory governments to transfer the ownership of a property to someone else. Stamp duty applies to the buyer, not the seller.

Transfer duty isn’t limited to property, it also applies to certain transactions such as the purchase of a motor vehicle, a business which includes land, and some insurance policies.

How much is stamp duty in NSW?

In NSW, the cost of stamp duty is based on the property’s sale price, or its current market value, whichever is higher.

It is calculated on a sliding scale, similar to income tax, so the more expensive the property, the more stamp duty you’ll pay.

However, these standard rates don’t apply to all property purchases, particularly first-home owners and foreign buyers.

Use our stamp duty calculator to estimate the stamp duty you may need to pay on the property you want to purchase.




Premium transfer duty

A premium transfer duty rate applies for residential properties worth more than $3 million.


Calculate Stamp Duty

To use this Stamp Duty Calculator you need to input the following:

  • Property Value/Purchase Price
  • Choose the State
  • Are you Investor or Home Owner?
  • Are you First Home Buyer?
  • What type of Property you are buying?
  • If you are Foreign Purchaser or not (for some states)

Note: – First home Owners are Entitled to the Current Grant.


What Is the Capital Gains Tax?

The capital gains tax is the levy on the profit from an investment that is incurred when the investment is sold.

When stock shares or any other taxable investment assets are sold, the capital gains, or profits, are referred to as having been “realized.” The tax doesn’t apply to unsold investments or “unrealized capital gains.” Stock shares will not incur taxes until they are sold, no matter how long the shares are held or how much they increase in value.

Under current U.S. federal tax policy, the capital gains tax rate applies only to profits from the sale of assets held for more than a year, referred to as “long-term capital gains.” The current rates are 0%, 15%, or 20%, depending on the taxpayer’s tax bracket for that year.

Short-term capital gains tax  applies to assets that are sold one year or less from the date they were purchased. This profit is taxed as ordinary income. For all but the wealthiest taxpayers, that is a higher tax rate than the capital gains rate.

How Capital Gains Tax works?

Most taxpayers pay a higher rate on their income than on any long-term capital gains they may have realized. That gives them a financial incentive to hold investments for at least a year, after which the tax on the profit will be lower.

Day traders and others taking advantage of the ease and speed of trading online need to be aware that any profits they make from buying and selling assets held less than a year are not just taxed—they are taxed at a higher rate than assets that are held long-term.

Taxable capital gains for the year can be reduced by the total capital loses incurred in that year. In other words, your tax is due on the net capital gain. There is a $3,000 maximum per year on reported net losses, but leftover losses can be carried forward to the following tax years.

2022 Tax Rates for Long-Term Capital Gains




What is the GST Margin Scheme?

The margin scheme is an alternative way of working out the GST you must pay when you sell property.
Under the margin scheme the amount of GST payable on your property sale is one-eleventh of the margin for your sale.

The margin scheme is a way of working out the GST you must pay when you sell property as part of your business .. so you must be carrying on an enterprise or a business of e.g. buying & selling property

You can only apply the margin scheme if the sale is taxable.

The margin is generally the difference between the sale price and the amount you paid to purchase the property.


When Can the Margin Scheme Be Used

Whether you can use the margin scheme depends on how and when you purchased your property.

  • If you have purchased property that was sold to you under the margin scheme, you cannot claim GST creditson this purchase .. because they did not claim credits when they bought it
  • To work out if you can use the margin scheme on the sale of your property, refer to GST and the margin scheme and the GST property tool below


When you cannot use the margin scheme

You cannot apply the margin scheme to a supply that you make if you had acquired the property in any of the following circumstances:

– you acquired it under a taxable supply on which the GST was worked out without using the margin scheme.
The rationale for this exclusion is that in such a case, you would have been entitled to an input tax credit on the purchase, and should therefore not be entitled to any further relief by way of the margin scheme

– you acquired it by inheritance, if the deceased person had acquired it through a supply that was not eligible for the margin scheme

– you acquired it from the operator of a joint venture in which you were a participant, and the operator had acquired it through a supply that was ineligible for the margin scheme

– you acquired it as a GST-free supply of a going concern, a farm or subdivided farm land, from an entity that was registered or required to be, and that entity had acquired it through a taxable supply on which GST was worked out without applying the margin scheme. For other rules applying where there are GST-free supplies.


Pre-purchase inspection report

There are a number of different types of reports you can have done on a property before you attempt to buy it.

building inspection will look into the state of the home you are thinking of purchasing, examining the roof, the floors, the walls for any damage, deterioration, cracking or rising damp, the plumbing and the electrical wiring.

pest inspection will look for any evidence of an infestation, most usually termites or termite damage.

strata inspection, if you’re buying an apartment or strata townhouse, will check on the finances and the minutes of the Owners Corporation running the building, to warn you of any problems in the building, or the likelihood of issues in future.

There are other inspections that might be necessary, depending on the age, and type, of property, including an asbestos inspection.

How much do pre-purchase inspections cost?

Costs can vary wildly, but when assessing which company you’ll go for, you have to consider that sometimes you get what you pay for. An extremely cheap report might end up not worth the paper it’s written on – and cost you a huge amount in the long term.

Generally building inspections tend to be about $450, pest inspections $400 or the both together $550. Strata inspections alone could be around $400.

There are ways to reduce the cost, however. Some vendors of properties have reports done in advance to supply free to potential purchasers.

Alternatively, many companies who carry out inspections list the properties on their website that they’ve already written reports on, so you can buy them more cheaply than if you were to commission your own. You could also ask the real estate agent if they know if any company has previously written a report.

There are also some businesses who share the cost of reports among buyers and sellers, like Before You Bid, which was one of the first in the market to do so. They have a range of different report share-cost models, with one having successful buyers paying more and the unsuccessful less.

The company Australian Property and Building Inspections advises that you can always make an offer on a property for private sale subject to a satisfactory report afterwards. If problems are found, they can be used to re-negotiate the price or cancel the contract. Make sure, however, that you’re clear beforehand about what will constitute a satisfactory result.

And you might always recover the cost of the report afterwards in other ways, too. Drexler once filed a report to a buyer showing $100,000 worth of work was necessary to the property. “So the buyer presented the report to the owner who agreed to give him $80,000 off the price as a result, which constituted 10 per cent.”


In case of lending for property development, pre-sales were uncommon. Most residential developments were small in comparison to the current property market cycle. ‘Large’ projects were often staged to mitigate sales risk. At that time, a project with 50 units was considered large.

In the run-up to the GFC, pre-sales had become commonplace. Typically, lenders would require 30% of the stock in a development to be pre-sold. This would provide pre-sales cover of 50% or so of a lender’s debt, where borrowings amounted to approximately 80% of the total development cost.

A ‘large’ development would comprise around 100 units. To achieve the required 30% pre-sales, might take a couple of months. The analysis undertaken by lenders was straightforward and manageable due to the size of the developments and generally the local domicile of buyers.

Today, developments often contain 200 or more lots and lenders ask for pre-sale coverage of 100% of the debt. This means around 130 pre-sold units are required to activate construction finance.

Since 2013, the Australian east coast property market has boomed, and developers have achieved these pre-sales at an unprecedented rate. In some cases, developers have even sold out entire projects in a single weekend.

Lenders need to undertake a more thorough analysis of each project, which can be complicated and is time consuming.

Pre-sales are a big deal

The reasons pre-sales appeal to both the lender and the developer are clear. To begin with, pre-sales ‘prove-up’ a development, establishing that buyers actually want the product on offer. Pre-sales support the developer’s applications for finance, and are now a requirement for almost all Bank development loan approvals. Pre-sales reduce the risk for both the lender and the developer, provided they remain in place. The pre-sales form part of the lender’s security (even though borrowers may sometimes think otherwise).

Property development pre-sales risk mitigation – post-GFC

During the Global Financial Crisis, pre-sale settlement rates in metropolitan Sydney continued to be strong. In areas outside Sydney, settlement rates were much weaker. Other areas, such as coastal NSW, saw very poor settlement rates.

In Sydney, industry feedback suggests that over the long-term, presale default rates have been low. Our experience has shown that in a rising market, all sins are forgiven. Often issues don’t come to the surface because high settlement rates mean the lender is quickly repaid. The developer deals with any issues behind the scenes, without the need for a lender’s intervention. However, in a declining market, developers under pressure may consider ‘questionable’ practices to obtain and manage pre-sales.

They are particularly important in a flat or declining market.

Examples of such practices, at various stages in the development cycle, include the following:

Prior to activation of construction finance

  • Offering undisclosed incentives (such as contract cash or goods rebates) to achieve the required pre-sales. This would maintain ‘headline’ prices and support bank security valuations. However, this distorts market values and potentially the balance of the bank’s unsold stock.
  • Contracting related-party sales (such as sales to family and friends), which are cancelled before settlement in the hope that they will be replaced with arms-length sales.

During construction

  • Convincing purchasers to release deposits (for cashflow).
  • Failing to extend sunset clauses or rescinding sales to capitalise on market price rises. Recent changes in NSW and other states consumer laws seek to offer additional protection against this practise.

At project completion

  • Off-set arrangements with development sub-contractors and suppliers, which hides the true value of the construction cost and potentially minimises or defers state and federal taxes.
  • Deferring stock revaluation (in a declining market).

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