Stamp duty is a tax that varies depending on which state or territory you’re in, and it’s applied to certain types of property transactions. So, what exactly counts as dutiable property? It includes things like:
- Real estate or land
- Shares in companies
- Units in a unit trust
Now, when do you actually need to pay stamp duty?
It comes into play for:
- Documents or deals that involve transferring ownership of dutiable property
- Creating rights related to specific assets
When Might You Need to Pay Stamp Duty?
You could find yourself liable for stamp duty in a couple of situations:
- When you’re involved in transactions that transfer property
- When a trust is being set up
Whether or not stamp duty applies to a property transfer depends on the details of the transaction and the property’s value. When it comes to setting up a trust, the rules vary based on where the trust is established, as different regions have different laws.
These two scenarios can lead to very different stamp duty amounts. For example, in Australia, the stamp duty for creating a trust with a minimal amount of trust capital can be up to $500.
However, if you’re transferring property, the stamp duty will be calculated based on the property’s value and is usually charged at progressive rates.
In Victoria, the stamp duty for setting up a trust is a fixed amount, provided you get it stamped within 30 days of signing the deed. The fee is $200. If you miss that 30-day window, you might have to pay some interest on top of the stamp duty.
In states like Queensland, there are no stamp duty costs applicable. You will need to check the information as per your region. Along with this, the time for the duty payable will also differ.
What Happens If You Lodge a Declaration of Trust Late?
If you lodge a declaration of trust late, you might face some penalties and interest charges. Here’s what to expect:
Penalty Tax: Generally, the penalty starts at 25% of the amount you defaulted on.
Interest Rate: The interest you owe is based on the market rate, which changes each year, plus an extra premium rate.
Depending on your specific situation, the penalty tax could be increased or reduced. In some cases, it might even be waived entirely. Similarly, the interest might be partly or fully waived.
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