Stamp duty covered by bank loan?

Hi all

Its too late to call my bank tonight, but before I do tomorrow, could someone please clarify whether I need to factor stamp duty into my upfront costs (ie. ensure i have savings now to cover stamp duty) or whether it can be rolled into my loan?

I'm looking at buying at auction in the ACT and I understand I have 90 days to pay stamp duty from the date of exchange of contracts. This would appear to provide enough time for the bank loan to come through.

Can I then just focus on having my 5% or 10% deposit, plus other upfront costs, and expect my bank to include stamp duty in the loan?

If absolutely necessary, I could sell some shares to get the cash, but would prefer not to at this stage.

thanks helpful people!
 
Depends on a lot of things.

Is this for an IP? If so, is the deposit coming from equity? If so, do you have enough equity to cover stamp duty?

What have you asked the bank for?
 
Cheers. Its for a PPOR (our first property purchase)

We haven't specified an exact loan amount to the bank yet as we have been focused on a place going to auction, just a possible price range (ie. $500,000 - $550,000).

I hadn't factored stamp duty in when I first spoke with the bank, and we are now looking to bump up our price range (with the assistance of a family guarantee).

I'll need to advise the bank of both of these revisions first thing. (They are aware of and are finalising the guarantee.)

While we can foot the stamp duty from our savings, it will leave us with not as much as we'd like for other contingencies.

I had planned to park our extra cash - $30,000 or so - in the offset account.
 
It is difficult to answer your questions without understanding your situation but I will try.

How much are you intending to borrow for the property? 80%, 90% ... of the value? This will impact how much the bank will lend you. If above 80%, you will need to buy mortgage insurance - that will also run into the thousands.

How much deposit will you have?

What is a family guarantee? Is your family putting up their PPOR as security for your purchase?

Do you have a mortgage broker helping/educating you?
 
The family guarantee is broadly as you've described. (I am undoubtedly fortunate to have caring and supportive parents).

It will enable me to borrow 100% of the property value + costs, plus avoid LMI.

I want to use as little of the guarantee as possible, but leave myself a good cash buffer.

This would mean making a 10% deposit based on the purchase prince minus the costs (including stamp duty in the order of 25K).

I just want to make sure that the bank can cover the stamp duty in the loan in a timely way that will enable me to meet what i understand to be the requirement in the ACT that stamp duty is paid within 90 days of contract signing - so i don't have to have to pay it out of my own funds.

cheers!
 
You need to talk to your solicitor and find out what the practice is in the ACT.

In NSW the bank would normally require the stamped transfer at settlement so they can register immediately.

In Victoria the practice in the 80s was to stamp the transfer after settlement.

The difference being that in the 80s in Victoria the contract was not what was stamped.
 
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