Understanding Stamp Duty and Other Property Tax

Understanding Stamp Duty and Other Property Tax

Owning a property involves a lot of ‘hidden costs’ – one of the biggest being tax. There are five main types of tax you will have to pay before and after purchasing a commercial property. These taxes go towards funding government services such as public transport and infrastructure. You have 30 days upon purchase to declare your purchase to the government, otherwise you will be subject to penalties and interest on top of the tax.

The biggest tax exemption is if the property is your principal place of residence, which you will be required to prove. This is because it is not an investment property; you are not earning any money from it.

If you are earning money, however, these are the 5 taxes you need to be aware of.

Tax #1: Stamp Duty

Conveyancing duty is commonly known as stamp duty. It is charged by state or territory governments upon purchase of the property. Stamp duty will vary across different properties; a stamp duty calculator from the ACT Revenue Office can be found here.

Tax #2: Rates

Rates are charged by local governments (councils) to fund local initiatives. They are usually charged every quarter. As of the time of writing this (April 2025), the current Labor Government is in the process of abolishing stamp duty and replacing it with higher rates.

Tax #3: Land Tax

Land tax is an annual tax charged by most state or territory governments. It compromises of a fixed charge currently valued at $1,612 and a valuation charge that depends on the value of your property. You can find a land tax calculator from the ACT revenue office here.

Tax #4: Capital Gains Tax

When you sell a property, the difference between how much you paid for it and how much you sold it for is known as a capital gain. It is taxed at the same rate as taxable income.

Tax #5: Foreign Ownership Surcharge

If you are not an Australian citizen but own property in Australia, you will need to pay the foreign ownership surcharge. It is valued at 0.75% of the Average Unimproved Value per year.

If you have any questions about property tax, please do not hesitate to contact me. I am here to help.