Stamp duty, which is a government fee, is generally mandatory on new and used cars. The fee is designed to cover a transfer of vehicle ownership, with the tax calculated based on the vehicle’s value.
Each state and territory has its own regulations and rates, but there are also some exemptions and legal ways to minimise or potentially avoid paying stamp duty on a car, depending on specific circumstances and eligibility criteria.
Eligible Concessions and Exemptions
Some individuals may be eligible for exemptions or concessions on stamp duty due to special circumstances. These exemptions can vary across states, albeit there are typically general categories that may apply.
For example, states, such as New South Wales, Victoria, and Queensland offer stamp duty exemptions for people with disabilities if the car is specially modified or used for mobility purposes. In Victoria, if the vehicle is used to transport a person with a permanent disability, they may qualify for an exemption.
Farmers and other primary producers may also be eligible for reduced or exempted stamp duty when purchasing certain vehicles, such as those used exclusively for agricultural purposes. States like Queensland and South Australia provide discounts to primary producers if the vehicle meets specific requirements.
There are also exemptions for charitable or non-profit organisations in some states.
Veteran and Pensioner Concessions
Certain veteran and pensioner groups may qualify for stamp duty concessions or exemptions. In Queensland, for instance, some veterans and holders of a Centrelink Pensioner Concession Card may be eligible for reduced stamp duty on their primary vehicle.
Each state has its own conditions and eligibility requirements for these concessions, and applicants typically need to provide proof of their status.
Private or Interstate Sales
Buying a car privately or from another state can sometimes reduce stamp duty costs, but it does not eliminate them entirely. Stamp duty is usually calculated based on the car’s value at the point of registration in your home state.
However, if a vehicle is registered interstate, it may temporarily reduce upfront costs. When transferring the registration to your home state, you will still need to pay stamp duty, so this approach generally only defers the payment rather than avoiding it.
Low-Emissions or Electric Vehicles
Some states and territories have introduced incentives to encourage the purchase of environmentally friendly vehicles, which can include reduced or waived stamp duty.
In the Australian Capital Territory, for example, fully electric vehicles are currently exempt from stamp duty, as part of an initiative to promote green vehicle use.
Victoria also offers reduced rates for zero or low-emission vehicles. If you are considering a new car purchase, check your state’s incentives for green vehicles.
Family Car Transfer
In certain states, transferring a car to an immediate family member (such as a spouse, parent, or child) may incur a reduced stamp duty rate or be exempt entirely.
For instance, in New South Wales, stamp duty is not payable if a vehicle transfer is between spouses, provided the car is registered in one spouse’s name and will be transferred to the other spouse’s name without change of ownership.
Similar provisions exist in other states, though specific rules may apply, such as proving the family relationship and meeting residency or vehicle use requirements.
Older Vehicles
If you’re worried about the cost of stamp duty, remember, the tax is calculated based on the vehicle’s market value, so purchasing an older or less expensive car could help you keep this fee in check.
In some states, vehicles below a certain value threshold may qualify for minimal stamp duty. Additionally, certain states, such as Tasmania, charge a flat rate for older vehicles under a specific value, resulting in lower stamp duty costs for buyers of inexpensive, used cars.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.