If you’re in the market for a car, you’ve probably heard of stamp duty. It’s one of the vague terms, along with CTP and GST, that you’ll see added to the end of a new car price. But what is it?
Stamp duty defined
Simply put, stamp duty is a tax applied to car sales by your state or territory government. Sometimes it’s called ‘motor vehicle duty,’ or ‘vehicle registration duty,’ or even ‘licence duty,’ but these terms all mean the same thing.
You must pay stamp duty whenever you are purchasing a motor vehicle. Stamp duty applies to all motor vehicle transactions. This means you must pay it if you’re buying a new car from a dealer or a used vehicle from a private seller.
A dealer will collect your stamp duty along with other charges when buying a new, certified used or used car. In a private sale, you must calculate the stamp duty yourself and pay it to your state’s revenue office.
In some cases, such as South Australia, you must determine whether you’re using the vehicle for commercial purposes before you calculate how much stamp duty is owed.
How do I calculate it?
Each state has different classifications, rates and ways to calculate stamp duty. Some states calculate rates with price thresholds; others factor in how environmentally friendly the vehicle is; some ask whether it’s a commercial or non-commercial vehicle.
Below, I’ve collected all the calculators direct from government sources.
- New South Wales Motor Vehicle Registration Duty Calculator
- Victoria Motor Vehicle Duty Calculator
- Queensland Vehicle Registration Duty Estimator
- Tasmania Motor Vehicle Duty Calculator
- Western Australia Licence Duty Calculator
- South Australia Stamp Duty Calculator (Non-commercial vehicles)
- South Australia Stamp Duty Calculator (Commercial vehicles)
- Northern Territory Motor Vehicle Revenue Duty Calculator
- Australian Capital Territory Motor Vehicle Duty Calculator
How do I reduce it?
Unfortunately, you can’t reduce your stamp duty. It’s a tax set by the government. Like all taxes, we have to pay it unless we want a nasty surprise from the tax office. What you can do is reduce costs by shopping around for cars and car loans with low fees and low interest. Talk to a financial professional to see what they can do for you.
This professional post is brought to you by Savvy Finance.