Planning to buy a new home? Refinance an existing loan? When it comes to home loans, you will come across various terms that you need to be familiar with. For instance, we already know what mortgage, property tax, and investment property mean, but what about mortgage duty? In this article, let’s determine what this term means for an Australian property investor.
Each state in Australia has its own mortgage duty guidelines.
If you’re an Australian property investor, make sure to understand the guidelines of your respective state to avoid inconvenience.
Mortgage duty refers to duty which is charged on the amount secured by a mortgage, or any advances made under the agreement. It is paid within three months after the date of an advance of the first signing of the document.
One way to determine the amount of mortgage duty is through the use of a mortgage duty calculator. Take note, though, that as with all other online calculators related to home loans, a mortgage duty calculator can only give estimates on the amount that you need to pay, since there are several factors that come into play with mortgage duty.
One of the factors that affect mortgage duty is the state you’re in. Each state in Australia has its own set of mortgage duty guidelines so if you’re an Australian property investor, make sure to understand the guidelines of your respective state to avoid inconvenience.
What are the charges of mortgage duty in each state? Mortgage duty is seen as an additional financial burden, so some states have already abolished mortgage duty, while other states are already in the process of doing so. For instance, South Australia, Victoria, as well as ACT and Tasmania have already abolished it.
In Western Australia, the mortgage duty costs $20 for amounts up to $10,000. After that, there will be an additional 20 cents for every $100. When it comes to New South Wales, the mortgage duty costs $5 for amounts up to $16,000. If the amount is more than that, there will be an extra $4 for every $1,000. In Queensland, you will pay 40 cents for every $100.
For more information, you can visit these state websites:
- NSW – http://www.osr.nsw.gov.au/taxes/abolished/iga/factsheet/abolition-nsw-mortgage-duty
- Victoria – http://www.sro.vic.gov.au/abolished/mortgage-duty
- Queensland – https://www.treasury.qld.gov.au/taxes-royalties-grants/duties/index.php
- South Australia – https://www.revenuesa.sa.gov.au/taxes-and-duties/stamp-duties/mortgages
These are some of the things that you need to know about mortgage duty. Various online resources will be able to help you understand how it works. It is likewise ideal to seek investment property advice from your local government.
Got other ideas on mortgage duty and property tax in Australia? Share your investment property advice and insights in the comments section.