JUST BY CHOOSING TO BUILD.
At Build In Warrnambool you’ll often hear us talking about Stamp Duty. That’s because it’s possibly the single biggest saving you’ll make by choosing to build.
Few people purchasing an existing home are prepared for the shock that comes when they discover how much they have to in Stamp Duty, on top of the purchase price. But when you choose to build you don’t pay Stamp Duty on the house you build. You only pay it on the land, ultimately saving you thousands of dollars.
So what is stamp duty?
Stamp Duty is a term used for Land Transfer Duty. Put simply, it’s a type of tax that you pay to have a property transferred into your name. The amount you’ll pay is calculated on the value or purchase price of the property. Circumstances also affect how much you’ll pay such as whether your buying to live in yourself, for investment, first home owner, pensioner etc. Let’s look at some figures calculated for Victoria Jan/Feb 2016 from the State Revenue Office Stamp Duty Calculator.
Purchasing an existing home for $450,000
First Home Owner: Stamp Duty Payable $9485
Previous Home Owner: $18,970
Remember, Stamp duty is an additional cost, on top of the purchase price.
When you build a new home you don’t pay Stamp Duty on the house as no transfer is taking place. You only pay stamp duty on the block of land you buy. And this is where the big saving is!
Purchase a block of land for $150,000 Build a house on it for $300,000 ($450,000 overall spend)
First Home Owner: Stamp Duty Payable $1935 – Saving $7550
Previous Home Owner: $3,870- Saving $15,100
Investor: $4070- Saving $18,000
There are some stamp duty concessions available. For example, the pensioner duty exemption or concession to name one. You can learn about them all here
So you can now see that the money you save on paying Stamp Duty just by building is considerable. And that’s just one reason why building is your smart choice. The other awesome thing about building is that the $450,000 you spend building a home could possibly have produced a property with a higher value upon completion, delivering you instant equity. By following a few basic guidelines and having the right team behind you, it is possible to build a home worth more than what it cost you to build it. That’s why you’ll often hear us here at Build In Warrnambool say that building can be like buying wholesale. If you find a brand new home for sale, it’s possible that some savvy individual has built the home to sell and make a few bucks on the way through.
If you’d like to learn more about all the advantages of building (there’s loads) visit The Advantages of Building.
Like the idea of building but don’t know where to start? We can help you get started on your home building journey. Get in touch with Natalie Stevens (that’s me!) your local Home Building Advisor or call me direct on 0407 889 458 – Happy to chat all things home building anytime!
So, you’ve decided to build? Great Choice! Read our Top 10 Tips for Home Building here.
Like to know what kind of bang you’ll get for your buck? Explore House and Land Packages in Warrnambool’s most popular estates.
Discover how building can be easy, fun and a smart financial move.
-Nat Stevens Build In Warrnambool 0407 889458