Stamp duty, now referred to as property transfer duty in Tasmania, is a tax payable to the state government when you acquire interest in property in some form. This means if you purchase, are gifted or inherit property or vacant land, as well as through easements, covenants and shares, you'll be required to pay stamp duty.
The duty is calculated on the market value of the land or property, or the consideration (the price being paid for the property), whichever amount is greater. What this means is that even if you purchase the property below the market value, for example at a discount from a friend or family member, you will still be required to pay property transfer duty on the actual value of the land or property, rather than on the amount you paid for it.
Property transfer duty rates relevant to land and property values in Tasmania are as follows:
$3,000 and below = $50
$3,000 - $25,000 = $50 plus $1.75 for every $100, or part, by which the dutiable value exceeds $3,000
$25,000 - $75,000 = $435 plus $2.25 for every $100, or part, by which the dutiable value exceeds $25,000
$75,000 - $200,000 = $1,560 plus $3.50 for every $100, or part, by which the dutiable value exceeds $75,000
$200,000 - $375,000 = $5,935 plus $4.00 for every $100, or part, by which the dutiable value exceeds $200 000
$375,000 - $725,000 = $12,935 plus $4.25 for every $100, or part, by which the dutiable value exceeds $375 000
Over $725,000 = $27,810 plus $4.50 for every $100, or part, by which the dutiable value exceeds $725 000
For example, if you purchased a property worth $250,000, this would place you in the $200,000 - $375,000 threshold. This means you would be charged an initial fee of $5,935. On top of this, you would be charged $4.00 per every $100 (whole or partial) exceeding $200,000, to a total of $2000 ($4.00 x 500). Excluding any additional fees, you would therefore be required to pay $7,935 in property transfer duty.
Property transfer duty is payable to the Tasmanian Government Department of Treasury and Finance. Certain documents and forms must be lodged depending on how you are obtaining the property. These may be lodged in person, or by mail to the Commissioner of State Revenue.
Like other state government taxes, the money goes into the state budget, to be used to fund such public sectors as health, police, justice and emergency services, and roads and transport.
You become liable for property transfer duty from the moment the transaction occurs, and you have three months from this date to pay the dutiable amount you owe. Interest and penalty taxes may begin to accrue if you do not make your payment on time.
Tasmania does not offer concessions or exemptions on transfer duty to pensioners or first home buyers. Also, since the state government charges stamp duty on the acquisition of interest in property, including when it is inherited, there is also no exemption or concession available if the property is inherited from a deceased person.
However, concessions may be available when property is being transferred between partners in a marital or de facto relationship, provided certain criteria is met. The property must be owned wholly by both parties, the two parties must have equal shares or serve as joint tenants, and the property must be their principal place of residence.
If duty has been paid on the transfer of vacant land between parties to a marital or de facto relationship, a refund may be available, provided the parties now have joint shares in the land, and have built a house on the land to use as their principal place of residence. To be eligible, these conditions must have been met within 2 years from the date of the initial transfer.
If the property is being transferred from the two parties involved in the relationship to just one of the parties involved, this exemption will not apply.
There may also be an exemption available following the breakdown of a marriage or de facto relationship. Again, certain criteria must be met, and certified documents must also be presented to prove the termination of the relationship.
Read more about transfer duty in Tasmania here.