An issue that is often overlooked with respect to stamp duty is that if a buyer purchases a property from the same seller on more than one occasion then the stamp duty is likely to be aggregated over the two (or more) purchases.
Brandt King, a Senior Conveyancing Paralegal at Quinn & Scattini Lawyers, provides an example of how this might work.
“Suppose Mr A purchases a property from Company Z in 2010 for $200,000.00 and then buys another property from Company Z in 2013 for $300,000.00. Were the two transactions treated separately for stamp duty purposes then, based on today’s rates (and assuming the ‘No Concession’ rate applies), the stamp duty would be $5,425.00 for the $200,000.00 property and $8,925.00 for the $300,000.00 property. This would make the total stamp duty $14,350.00.
If the two purchase prices are aggregated (combined) then the total purchase price would be $500,000.00 resulting in stamp duty of $15,925.00 (at today’s rates and assuming “No Concession” rate applies).
The difference in stamp duty in this example is $1,575.00. However, the difference for higher purchase prices would be far higher. If the treatment of stamp duty is not established correctly at the time of purchase then a buyer could later be facing UTI (Unpaid Tax Interest) and a possible fine which could run to thousands of dollars.”