Stamp duty on mortgage vs Stamp duty on the purchase

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new2invest
Participant
@new2invest
Join Date: 2010
Post Count: 38
September 2, 2014 - 2:40 pm
What is the difference between Stamp Duty on Mortgage and Stamp Duty on Purchase?
Scenario:
IP – 400K
Stamp Duty – 20K
LMI – 10K
conveyancing $1k
In the above scenario, can I claim Stamp duty + LMI + Conveyancing?
Catalyst
Participant
@catalyst
Join Date: 2008
Post Count: 1,404
September 2, 2014 - 3:05 pm
Stamp Duty on Mortgage is imposed by the bank (based on the loan).
Stamp Duty on Purchase is imposed by the state (based on the price of the property).
Yes you can claim. Stamp duty on purchase and conveyancing is added to your cost base when selling.
LMI (I think) is deducted over 5 yrs (check this with your accountant).
Benny
Moderator
@benny
Join Date: 2002
Post Count: 1,416
September 2, 2014 - 6:36 pm
And Stamp Duty on mortgage is a “Borrowing Cost”, so can be reclaimed via Tax relief over (I think) 5 years – along with myriad other borrowing costs.
Anything to do with having the loan happen is a borrowing cost – e.g. application fees, Stamp Duty on many bits and pieces, LMI, mortgagee’s Solicitors fees, searches, etc.
Benny
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 2, 2014 - 8:37 pm
Nope
Stamp duty is imposed by the State Government.
There is stamp duty on many things such as transfer of land, mortgages, insurance contracts, LMI.
Stamp duty on land transfer is the main one but there is also stamp duty on mortgages in some states such as NSW. However there is an exemption for a mortgage to purchase residential property, in NSW, where the purchaser is a natural person – ie not a company or trustee. A LOC set up on NSW would attact mortgage duty where the funds being borrowed were not immediately to be used for the purchase of property.
There is also another stamp duty on LMI premiums, up to 10% in some states.
Stamp duty on a mortgage would be a borrowing expense as would stamp duty on LMI.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 2, 2014 - 8:42 pm
new2invest wrote:
What is the difference between Stamp Duty on Mortgage and Stamp Duty on Purchase?
Scenario:
IP – 400K
Stamp Duty – 20K
LMI – 10K
conveyancing $1k
In the above scenario, can I claim Stamp duty + LMI + Conveyancing?
You don’t actually mention stamp duty on the mortgage here.
You could only claim LMI over 5 years.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
September 2, 2014 - 9:25 pm
LMI is deductible over 5 years or the term of the loan whichever is the shorter.
Stamp Duty on LMI can be upto 11% I hate to say if your living on SA.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
new2invest
Participant
@new2invest
Join Date: 2010
Post Count: 38
September 3, 2014 - 12:08 pm
Thank you all for the quick replies
So to sum up.
– Stamp duty charged by the state is NOT deductible
– Stamp duty charged on mortgage or LMI is deductible over 5 years.
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
September 3, 2014 - 9:56 pm
new2invest wrote:
– Stamp duty charged by the state is NOT deductible
It is in Canberra :-)
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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