A commercial property transaction includes unavoidable expenses, like stamp duty – a fee payable upon the purchase of property.
Let’s start by looking at what stamp duty is, how it’s calculated, and any exemptions that might apply in Australia.
Here’s everything you need to know.
Contents
Stamp Duty on a Commercial Property
Stamp duty or transfer duty is a state imposed fee applicable on individuals who buy a property (commercial or residential) in Australia. This nominal fee includes the transfer of businesses, insurance, and other shares, critical to a sale or purchase of land.According to the NSW Government’s Revenue Department, you’re required to pay duty or transfer fee when you purchase a commercial property. In some cases, you may also need to pay stamp duty on fixtures, machines, plants and equipment.
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What Impacts the Stamp Duty on a Commercial Property?
Cost of stamp duty depends on several factors, including sale price of the property, as well as a buyer’s location and business purpose. Common factors to consider when determining stamp duty costs on a commercial property are:
- The price paid for the property or highest market value
- The expected use of the property and surrounding facilities
- The property purchased is a principal place of residence
When Do You Need to Pay Stamp Duty in a Property Sale or Transfer?
The general requirement for paying stamp duty is within three months from the date of sale or transfer made as per the contract. Stamp duty is payable on most commercial properties, when you buy land or a building or have ownership transferred to you for both. You may also have to pay stamp duty in other circumstances, such as when you acquire commercial land or property in a gift deed.
How to Determine Stamp Duty on a Commercial Property?
When purchasing commercial property in Australia, it is mandated that you pay stamp duty based on the value of the property and the state in which it is located. The rate of commercial property stamp duty is authorised by state and territory governments.For example, the stamp duty on a $1 million commercial property in NSW would be estimated at $30,930. To assist buyers with commercial property purchases, the NSW government features a calculator that helps determine the stamp duty for a specific property.
How to Pay for Stamp Duty for a Commercial Office?
It’s important to get in touch with a solicitor or a conveyancer to arrange payment for the stamp duty levied on a commercial property. The first step is to submit an application to the Revenue NSW to issue an assessment.
Right after, the contract for the property purchase or transfer of land will be checked after which you’ll be notified about any concessions you qualify for. You can postpone payment by up to 12 months if it’s an off-the-plan purchase.
What Stamp Duty Exemptions Exist for a Commercial Property?
Whether you’re a small business or a large-scale enterprise, it is possible to qualify for a concession or stamp duty exemptions in the following situations:
- If you’re a stated beneficiary of the deceased estate owner
- If the duty payable is settled between a married couple or de facto
Key Takeaways
- Stamp duty is a state-imposed fee on commercial property purchases in Australia, also applicable to fixtures, machines, plants, and equipment.
- Factors affecting stamp duty include the property's purchase price, intended use, and whether it's a principal place of residence.
- Payment is generally due within three months of the sale or transfer.
- The rate varies by state, with calculators available for specific estimates, e.g., NSW government's calculator for property stamp duty.
- Exemptions or concessions may apply under certain conditions, such as property transferred between spouses or from a deceased estate.
Need Help with Your Commercial Property? Contact Leah Jay
Invest in a valuable commercial property with the help of property experts who will not only help you find out how much stamp duty is payable for a property, but also provide other property solutions to ensure the best returns.
Leah Jay deals with commercial property management and procurement for small to large-scale businesses and companies in Australia. Our expert team has experience with the NSW commercial estate landscape and can answer all your queries. To learn more about commercial property management, call us today.
