I am hoping that someone may be able to offer some advice in relation to mortgage stamp duty. I have a PPOR in Adelaide and purchased a property in QLD by increasing the line of cr on the ppor and rolling the QLD property in as well. The bank charged stamp duty on the full amount of the mortgage in both states. They advised me I need to apply to the stamp duty offices for a refund. I inititally didn’t want to sign the mortgage document because of this, but I had little choice as the bank advised they would not guarantee making settlement and I would have been risking my deposit.
I am now in the process of purchasing a property in NT where there is no mortgage stamp duty. Again I have discovered that because I am rolling this property into the LOC as well that now I have to pay more stamp duty to both QLD and SA stamp duty offices. If I had just redrawn the equity in the LOC and obtained a normal loan for the NT property I don’t think I would have had to pay the stamp duty ($2100!). Has anyone else had this experience and can anyone please advise me what to do. My Mortgage broker was not aware that this would be the case. I am now out of pocket by several thousand dollars due to the structure of my loans.
Thanks
SpotHi Spot,
I am not a mortgage broker but as I understand it mortgage duty is a state levied tax and as such is imposed in the state the mortgage originates from which in your case is SA.
The other stamp duty often referred too is property stamp duty (tax levied on property being purchased) this originates from the state where the property is located.
As I said from the outset – not a mortgage broker and more learned people than I will comment.
I would also suggest you consult another broker and get a second opinion as your loan structure seems very clumsy.
Derek
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Hi Derek
Thanks for the response. I do actually mean the mortgage stamp duty not the property stamp duty. Like you, I was also under the impression that the mortgage stamp duty was determined by the state the mortgage origninated in. The bank advises me that mortgage stamp duty is determined by the state the security for the loan is held in. I rang the stamp duty office in QLD and they advised me that the bank should have apportioned the stamp duty according to the amount of the loan relating to the QLD property and the amount of the loan relating to the SA property. This makes more sense.
However when I asked the bank why the second purchase in NT resulted in stamp duty payable to QLD they advised me that it was because the QLD property is part of the security for the entire loan and that every time I increase the credit limit then stamp duty is payable in each state. This is regardless of the fact that the QLD property is at its maximum equity (ie 80% of the value).
SpotYes, I made a post explaining all of this sometime last week. If you buy in WA, you will have a similar problem. This only occurs where you cross colateralise, though.
We had to fork out an extra couple of thousand because of the extra stamp duty on mortage for our QLD IP.
I will try and find my older post so you can check out the links.
‘Eat rich food, barbeque a yuppie’ [greedy]
Found it.
Here you go
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=8874
‘Eat rich food, barbeque a yuppie’ [greedy]
Hi Rugbyfan
Thanks for the link. I have looked at your post and the links and they are very useful. Did you pay the stamp duty proportionately in each state – ie if your total loan was say $400k did you pay stmp duty on $400k in QLd and on $400k in WA?
This is what happened to us. Our LOC is $320k on PPOR and $180k on QLD IP. We paid stamp duty on $500k in SA and $500K in QLD. Now we need to get a refund.
I think Mortgage brokers should disclose these costs as part of recommending a certain loan structure.
Thanks again – this forum is a fantastic for learning.
Spot
We only had our PPoR when we bought the QLD IP. This meant that we paid stamp duty on our loan facility for our NSW PPoR and the QLD IP. I don’t know anything about a refund though, you may be misinformed there.
Our WA property is still in the early stages, so we have not yet drawn down hence no stamp duty. Although it actually works in our favour in WA as it is the only WA prop. we own at present. The stamp duty on mortgage is actually less than what it would be outright. This is because we have most of our investments outside WA. It sounds confusing and the formula used to work it out is on that weblink.
Basically we need to get all our IP’s valued at the highest price to reduce the stamp duty on the mortgage.
It sucks, but there are some greedy governments who like to take advantage of the investor.
I would love to know if you are succesful with a refund though, as my wife and I could also get in on it. She did some pretty heavy checking last time though and as she is a solicitor, she is pretty good at finding any loophole.
‘Eat rich food, barbeque a yuppie’ [greedy]
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