Transfer Duty (WA)
Transfer duty, formerly stamp duty, is a tax placed on the value of a property being bought. The dutiable value is the property’s purchase price or the property’s value on the open market, whichever is higher. The duty in Western Australia is collected for the State Government by the Office of State Revenue and needs to be paid upfront. It is governed by the Duties Act 2008.
When does transfer duty apply?
Transfer duty applies to the changing hands of “dutiable property”, which refers to land, a right, a chattel or a business asset in Western Australia.
Land includes any estate or interest in land, a pastoral lease, or a mining tenement. A right includes a right to income, capital growth, minerals or water. A business asset includes goodwill, identity and a contract to supply foods or services. A chattel is part of a transfer agreement and alone cannot be subject of the transfer.
The duty applies to such transfers as:
- a transfer of property;
- an agreement to transfer property;
- a declaration of trust over property;
- a vesting of property by statute or by court order;
- a foreclosure of a mortgage over a property;
- an acquisition of new property, via its creation, grant or issue;
- a surrender of “special dutiable property”;
- a trust acquisition or trust surrender;
- a partnership acquisition;
- a farm-in agreement (for mining).
Special dutiable property includes a strata lease, a life interest in land, an easement, or a right of way.
How is transfer duty calculated?
There are two main rates of transfer duty in Western Australia: the general rate and the residential rate. As with income tax, transfer duty is calculated using a sliding scale.
The general rate applies to commercial property, rural property that is not also residential, and vacant land not intended for residential use.
Property’s dutiable value $0-$80,000 – 1.9%
$80,001-$100,000 – $1520 plus 2.85% of the value over $80,000
$100,001-$250,000 – $2090 plus 3.8% of the value over $100,000
$250,001-$500,000 – $7790 plus 4.75% of the value over $250,000
$500,001 and over ‑ $19,665 plus 5.15% of the value over $500,000
The residential rate applies to places of residence, rental homes, mixed-use property, and land on which a home is built within five years of purchase.
Property’s dutiable value $0-$120,000 – 1.9%
$120,001-$150,000 – $2280 plus 2.85% of the value over $120,000
$150,001-$360,000 – $3135 plus 3.8% of the value over $150,000
$360,001-$725,000 – $11,115 plus 4.75% of the value over $360,000
$725,001 and over ‑ $28,453 plus 5.15% of the value over $725,000
Certain transfers are exempt from transfer duty, such as those which:
- involve state or local government or other public authorities;
- are performed for charitable or public purposes;
- which involve a transfer of a farm between family members;
- relate to bankruptcy;
- involve a transfer to incorporated associations.
A nominal duty of $20 applies to specified transfers, which include:
- subdivision of land;
- the distribution of property under a will or intestacy;
- those resulting from a relationship breakdown;
- those involving trusts, superannuation, or a fishing business licence.
First home owners
A person eligible for a first home owner grant may be entitled to a transfer duty concession on a home or land. To be eligible the value of the home must not exceed $530,000. If the home is valued below $430,000, no duty is payable. If the value of the home is between $430,000 and $530,000, the rate is 19.19% of the value above $430,000. For land, to be eligible the value must not exceed $400,000. If the land is valued below $300,000, no duty is payable. If the value of the home is between $300,000 and $400,000, the rate is 13.01% of the value above $300,000.
Foreign buyers must pay an 7% surcharge, known as a foreign transfer duty, on top of any transfer duty. A foreign buyer can be an individual, corporation or trustee.
Principal place of residence and business rate
If a property is either a principal place of residence or a Western Australian business asset, and its value is less than $200,000, the owner may be eligible for a duty concession. For a property valued up to $100,000, the rate is 1.5%. For a property valued between $100,001 and $200,000, the rate is $1500 plus $4.39% of the value above $100,000.
For advice or representation in any legal matter, please contact Armstrong Legal.