Do you pay stamp duty when refinancing?

Refinancing a mortgage in Australia generally does not require paying stamp duty, as this tax is typically only applicable when property ownership changes. However, if refinancing involves transferring ownership, such as adding or removing a borrower from the property title, stamp duty may apply. Homeowners should be aware of other refinancing costs, like discharge and application fees, which can affect the total cost of the process. To minimise expenses, seeking advice from professionals and comparing different lenders is essential for making informed refinancing decisions.

Many Australian homeowners consider refinancing their mortgage to secure better interest rates, access equity, or adjust their loan terms. However, a common question that arises is whether stamp duty applies when refinancing a mortgage. Understanding the costs associated with refinancing is essential, as unexpected fees, including stamp duty, can impact the financial benefits of switching loans. Clarifying whether stamp duty is payable when refinancing helps homeowners plan effectively and avoid unpleasant surprises.

While refinancing can offer significant savings, it's essential to understand the different fees and potential scenarios where stamp duty may be required. By addressing these considerations, homeowners can make more informed decisions about refinancing their home loans.

Do You Pay Stamp Duty When Refinancing?

The good news for homeowners is that stamp duty is generally not payable when refinancing a mortgage. This is because refinancing typically involves switching from one lender to another, or changing loan terms with the same lender, without transferring property ownership. Since stamp duty is primarily charged when there’s a change in ownership, refinancing your existing mortgage is exempt from this tax in most cases. This makes refinancing a financially attractive option for those looking to secure better interest rates or loan conditions.

However, there are some exceptions where stamp duty may apply during the refinancing process. If refinancing is tied to a transfer of ownership, such as adding a new borrower or removing an existing one from the title, then stamp duty may be triggered. For example, if you refinance to add a partner to the mortgage and the property title, this may be considered a change in ownership, and you could be liable for stamp duty. It’s essential to check with your lender or a financial advisor to determine whether your specific refinancing situation may involve stamp duty.

Other Fees and Costs Involved in Refinancing

While stamp duty is usually not a concern when refinancing, there are other costs that homeowners should be aware of. These can include mortgage discharge fees from your current lender, which cover the administrative costs of closing your old mortgage. Additionally, many lenders charge application fees for the new loan, as well as valuation fees to assess the current market value of your property. These fees can add up, so it’s important to consider them when calculating the total cost of refinancing.

In cases where refinancing involves accessing your home’s equity or transferring ownership, additional fees might apply. For example, if you are refinancing to release equity or transferring part ownership to another party, stamp duty could become payable, depending on the circumstances. It’s crucial to discuss these details with your mortgage broker or financial advisor to ensure you are fully informed of any potential costs, including how your state's specific rules might apply to equity release or property transfers.

How to Minimise Costs When Refinancing

To reduce costs when refinancing, it’s essential to shop around and compare different lenders. Many lenders offer special deals for refinancers, such as waiving application fees or providing cash-back offers. By comparing loan terms, interest rates, and fees, homeowners can ensure they’re getting the best deal for their circumstances. Additionally, it's worth considering lenders that offer low or no exit fees from the existing mortgage, which can further reduce the costs associated with refinancing.

A popular way to minimise refinancing costs is to seek advice from an experienced refinancing mortgage broker. They can help you navigate the refinancing process, identify any potential fees, and compare loan products from over 40+ lenders to secure you the lowest interest rates. They can also clarify whether stamp duty or other taxes may apply in your specific situation, especially if you are planning to change the property title or access equity. By getting expert advice, you can avoid costly mistakes and ensure that your refinancing decision is financially beneficial.

Conclusion

In most cases, Australian homeowners do not need to worry about paying stamp duty when refinancing their mortgage, as it usually only applies to property purchases or ownership changes. However, if refinancing involves transferring ownership or adding a new borrower to the title, stamp duty could become payable. Homeowners should carefully consider their refinancing options and be aware of other potential fees involved in the process, such as discharge and application fees.

If you are planning to refinance, we recommend you speak to an experienced refinancing mortgage broker who can help you compare and negotiate interest rates, to save you money and make your refinancing more worthwhile. Leave a message below and you will receive a call back from one of our team at Eden Emerald Mortgages.

Speak to an Expert and 

Get Your Mortgage Approved

To get started on your journey of securing a home loan, fill in the form below, and an experienced mortgage broker will contact you about your personal situation. You can also call us directly on (02) 9188 9398.

Shaun Bettman

#1 Mortgage Broker

Name*
Email*
Phone
Loan Amount*
Message*
0 of 350

You may also like