Can a Mortgage Cover The Clients Stamp Duty?

Potential homeowners may approach a mortgage broker with questions regarding stamp duty. In short, no, a mortgage cannot cover potential homeowners’ stamp duty. Generally, stamp duty is required to be paid in full before the potential homeowner signs a home loan agreement. Mortgage brokers calculate their client’s mortgages through the loan-to-value ratio (LVR).

Stamp duty refers to a type of taxation charged by the Australian state and territory governments for a wide variety of purchases, including vehicle transfers and registrations, lease and mortgage agreements, various insurance policies, Hire Purchase Agreement contracts, and property transfers. Stamp duty is calculated based on the total purchase price of a taxable expense but largely varies depending on where the individual resides.

While stamp duty cannot be added to an individual’s mortgage agreement, there are certain cases in which they can be found exempt from paying stamp duty depending on the individual’s place of residence, if they are first-time homebuyers, or if they receive pension payments. Additionally, certain Australian states and territories allow individuals who are considered first-time homebuyers, retirees, or deceased estates to qualify for stamp duty concessions.

Mortgage brokers can easily assist their clients with stamp duty questions and concerns by using a free online Stamp Duty Calculator. Potential homeowners who wish to learn more about stamp duty, concessions, and exemptions should reach out to a mortgage broker or visit the Australian Taxation Office’s official website for more in-depth information and assistance.