There are a lot of costs to consider when you are buying your first home. The most important thing you can do is understand every cost before you embark on your search for a property, that way you will avoid a huge bill shock when the costs start adding up – and they will.

Saving for a deposit, working out how much you can borrow and what your repayments will be, finding out if you need to pay Lenders Mortgage Insurance up front, solicitors fees, building inspections and strata reports, just to name a few. There's a whole list of costs in this blog.

Then there's the question of when do first home buyers pay stamp duty? You might be eligible for a grant, or you might not. You need to check out how much stamp duty you will need to pay so that you don't end up with a rude shock.
Stamp duty is one of the most controversial taxes that applies to property.

Stamp Duty, or Transfer Duty as it is sometimes called, is levied by each state government.

Here's what you need to know:

Each state has different stamp duty rates.

To find out how much you will pay, go to your state revenue department website. Most have calculators that are easy to use. (Here's one you can use for all states.) Put in the purchase price of the property, answer a few questions then viola!

The payment is due at different times in different states – in Queensland it is payable at settlement or 30 days after the Contract Date, whichever happens first. In New South Wales it is payable within three months of signing a contract unless it is an off the plan purchase. In Victoria it is payable within 30 days.

Many states offer concessions for first home buyers.

This can add up to a hefty discount depending on the price of the property. Each state has different thresholds so it is worth playing around with the stamp duty calculator to see how just a small change in purchase price may end up costing you a significant amount of extra stamp duty. It's really important to know this as it might affect your capacity to pay a higher price during negotiations.

Just be careful if the only way you'll qualify is by buying a brand new property. There are huge risks in buying off the plan or brand new apartments and houses.

Make sure you know the rules to play by.

Rules apply including how long you have to live in the property. So if you are thinking of Rentvesting you will have to make sure the property is your principal place of residence for the minimum timeframe in your state or you will have to pay stamp duty retrospectively. In most states the minimum period is 12 months. So don't plan on moving overseas or putting tenants in any earlier than the minimum qualifying period.

Do first home buyers pay stamp duty? The answer is, it depends! Check out the duties and concessions that apply in your state or territory. The best way to avoid bill shock is to be fully aware of all your costs, that way when the bills do roll in you will be ready.