2020 News

New calls for stamp duty reforms. Are you paying too much?

The car industry has renewed calls for states and territories to standardise motor vehicle stamp duties across Australia – as figures show the cost varies from $360 to $1500 on an identical $35,000 family car.

Stamp duty is a state tax and one of the many charges that is bundled within on-road costs for both new and used cars.

On cars that cost $100,000, the stamp duty can vary from $3400 in one jurisdiction to $7900 in another.

Research conducted by CarAdvice shows each state and territory structures stamp duty differently, penalising motorists in some states while providing others with a significant cost saving. The table can be found at the end of this article.

Most states charge a flat rate on the cost of the vehicle, or a rising rate as the price increases. Some jurisdictions base stamp duty rates on emissions, engine size, or fuel type.

For example, in NSW stamp duty is charged at 3 per cent up to $45,000 and 5 per cent beyond that threshold, plus a nominal $1350.

In Victoria, from 1 July 2020 stamp duty will be calculated at approximately 4.2 per cent for vehicles that cost less than $68,740 ($8.40 for every $200 or part thereof).

From 1 July 2020, for vehicles between $68,741 and $100,000 sold in Victoria, stamp duty is equivalent to approximately 5.2 per cent ($10.40 for every $200 or part thereof).

From $100,001 to $150,000, the stamp duty on vehicles sold in Victoria are calculated at approximately 7 per cent (or $14 for every $200 or part thereof), and cars above $150,000 are calculated at approximately 9 per cent ($18.00 for every $200 of part thereof).

In Victoria, motor vehicle stamp duty is calculated on the entire price of the car, rather than a stepped system that only charges a percentage above each threshold, as is often done in other states. All low emission vehicles in Victoria are charged at the lowest stamp duty amount.

Queensland has a sliding scale approach, from 2 per cent for electric and hybrid vehicles, to 4 per cent for cars with eight cylinders or more.

The ACT also has a sliding scale, but calculates its stamp duty based on CO2 emissions. Vehicles producing less than 130g of CO2 per kilometre are not charged any stamp duty, rising to 6 per cent for cars over $45,000 that produce more than 220g of CO2.

Western Australia charges 2.75 per cent stamp duty for cars that cost less than $25,000, 6.5 per cent on every dollar for cars that cost more than $50,000For vehicles valued between those two amounts the stamp duty is calculated as: [2.75 per cent + (dutiable value – 25,000)/6,666.66)].

In South Australia, passenger vehicles over $3000 are charged at a flat-rate of 4 per cent over that amount, plus $60. Stamp duty for new motor vehicles excludes the value of dealership accessories.

Tasmania charges a flat 3 per cent for vehicles valued up to $34,999, 11 per cent plus $1050 from $35,000 to $39,999, and a flat 4 per cent above that threshold.

The Northern Territory charges a flat rate of 3 per cent, no matter the value of the car, but many buyers are exempt. If you are transacting with a family member or someone you work with, this is considered a ‘non-arm’s length transaction’ and you pay no stamp duty.

As you can see from the examples shown above, the cost for identical cars varies greatly depending on where they are registered – and the different calculations make it difficult for car companies to offer national drive-away deals, especially on dearer models.

Read Full Story at www.caradvice.com.au

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