Can The Clients Use a Loan to Pay Stamp Duty?

Stamp duty refers to a form of taxation that is charged by state and territory governments for a wide variety of purchases and documents, including property transfers, Hire Purchase Agreement contracts, vehicle transfers and registrations, various insurance policies, as well as lease and mortgage agreements. 

A homeowner may think it wise to use a loan to pay for their owed stamp duty taxes, but this is not always permitted. Homeowners are required to pay their stamp duty before they sign the lending agreement and officially own the home, and most mortgage brokers will not permit their clients to use a loan to fund stamp duty. Mortgage brokers should be able to assist their clients with creating a budget or a plan for saving the funds required for tax duty. 

If a potential homeowner is concerned about stamp duty, they can easily calculate how much they will owe using a free online Stamp Duty Calculator and begin putting money aside to allocate to their owed amount. 

Borrowers may have more luck using a loan to pay for stamp duty in regards to a personal loan. However, they will face high-interest rates if approved and approval is not always guaranteed. 

Certain individuals may find themselves exempt from paying stamp tax depending on the area in which they reside, including individuals who receive pension payments or are first-time home buyers. 

To learn more about stamp duty requirements, potential borrowers can visit the Australian Taxation Office’s official website or reach out to a mortgage broker to obtain information specific to their financial status and borrowing goals.