When transacting in real estate in Western Australia, it is important to understand the various government charges that can significantly impact the overall cost of buying and selling. From stamp duty to land tax, shire rates, water rates, mortgage registration fees, and certificate of title ordering fees, understanding these charges is essential for both buyers and sellers. In this article, we will delve into the various government charges associated with real estate transactions in Western Australia, providing valuable insights into their purposes and implications.

Stamp Duty

Stamp duty is a significant government charge imposed on property buyers in Western Australia that can amount to as much as 5% of the purchase price. It is calculated based on the property’s value and is payable upon the transfer of ownership. The rate of stamp duty varies depending on factors such as property type, purchase price, and whether the buyer is eligible for any exemptions or concessions, such as the First Homeowners Rate of Duty or an Off-The-Plan Apartment purchase concession. It is important for buyers to consider stamp duty costs when budgeting for a property purchase.

Land Tax

Land tax is an annual tax levied on the value of land holdings in Western Australia that a person isn’t living on. It is payable by the owner of the property and is calculated based on the combined value of all taxable land holdings, excluding the family home. Land tax rates can vary depending on the total value of the land and any applicable exemptions or concessions, but can amount to thousands of dollars a year. Whilst land tax is deductible, it is crucial for property owners to factor in land tax costs when considering their overall property investment strategy.

Shire Rates

Shire rates, also known as council rates, are charges imposed by local government authorities to fund local services and infrastructure. They are calculated based on the assessed value of the property and cover services such as rubbish collection, road maintenance, and community facilities. Shire rates are generally paid annually by property owners and vary depending on the local government area in which the property is located. If you buy or sell a property at any point in the year other than the 1st of July, the pro-rata rates amount will be apportioned to you to either pay or receive as a refund at settlement.

Mortgage Registration Fees

When a property is purchased with the assistance of a mortgage, the mortgage document must be registered with Landgate. Mortgage registration fees are charged by the government for this registration process and are generally around $200 per mortgage, indexed annually. It is important for buyers to consider mortgage registration fees when evaluating the overall cost of financing their property purchase or refinance.

Certificate of Title Ordering Fees

A certificate of title is an official document that confirms a person’s ownership rights to a property. When a property is bought or sold, the settlement agent will need to obtain a digital copy of the Certificate of Title to confirm the existing ownership and reflect the change in ownership. A fee of around $30 is charged by Landgate for ordering a new Certificate of Title, which is usually paid by both parties respectively. This fee is charged by Landgate and passed on to the client.

Navigating government charges is an integral part of real estate transactions in Western Australia. Understanding the various charges, including stamp duty, land tax, shire rates, mortgage registration fees, and certificate of title ordering fees, is crucial for buyers and sellers alike. By considering these charges and factoring them into their financial planning, individuals can make informed decisions and ensure a smooth and successful property transaction. It is advisable to consult with a qualified settlement agent, conveyancer, or financial advisor to gain a comprehensive understanding of these government charges and their implications specific to individual circumstances.