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In a nutshell, stamp duty is a tax imposed by the state government when you purchase a property. It means you’ll need to save more to not only cover the deposit for your home but the cost of stamp duty – about an extra 20 per cent for your purchase. Stamp duty is a reality for all homeowners and isn’t something that can be avoided.

Stamp duty is typically paid upfront at settlement and it’s not something you have to sort out by yourself. Your conveyancer or lawyer will work with your lender regarding payment and how much is owed. While stamp duty isn’t allowed to be included in your loan, there is a way to lessen the burden slightly, especially if you haven’t saved enough on top of your deposit. You can contribute your deposit to pay for the stamp duty and your home loan will increase accordingly to compensate for this.

The easiest way to check how much extra you’ll need to save to include stamp duty is to use a stamp duty calculator, which is available online. You add your state, loan details and purchase price and the cost will be immediately calculated. There are also first homebuyer concessions available as well which vary in each state. Do your research to find out what you’re eligible for – if you’re entitled to a concession, it will make your financial situation a little less daunting.

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