Stamp Duty is Payable on GST…Say What?

Stamp Duty is Payable on GST…Say What?

Do you require a GST loan or a stamp duty loan? TaxLend offers short-term funding for your property purchase. 

Charging stamp duty on the GST inclusive price of a commercial property purchase, is the state government capitalising on a federal government tax.

Perhaps you’ve never considered the ‘tax on a tax’ before or even been made aware of it during a previous purchase, but the state government is double dipping, taking advantage of buyers when they pay GST on a commercial property purchase.

An eye-opening example:

Scenario – $4,000,000+GST purchase of an empty factory in Queensland.

• Federal Government (through the ATO) charges $400,000 in GST
  • Total cost now $4,400,000 (total purchase price)
• QLD Government charges stamp duty on the total purchase price
  • Stamp duty liability of $233,525 (plus almost $15,000 in transfer fees – a topic for another day)
• GST is refundable – bringing total purchase cost down to $4,233,525

Now, if stamp duty were not levied on the refundable GST portion, this would bring the stamp duty cost down from $233,525 to $210,525.

This is a difference of $23,000 (plus reduced transfer fees of close to $1,500) the QLD Government is benefiting from funds that it would not otherwise be entitled to. Not only is this taxing a tax but taxing a refundable tax, a $400,000 sum that does not even make up part of the bottom-line purchase price of the property.

It is imperative that you’re prepared for all costs associated with a property purchase. Always seek legal advice and speak with your accountant prior to purchase to avoid any unexpected additional costs at settlement.

Should you require ancillary funding for your property purchase, we offer 100% GST and stamp duty funding with 30+ day terms.

Apply here.

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