The ACT government is making good on its promise of phasing out stamp duty, announcing it will abolish the property tax for off-the-plan apartment and townhouse purchases up to $500,000 from July 1.
The stamp duty abolition will apply to any buyer – first-home buyers, upgraders, downsizers and everyone else in between – who purchase off-the-plan, the territory government said.
Under these changes, anyone purchasing a newly built apartment or townhouse valued at $500,000 will save $10,360 in stamp duty.
“The ACT has been leading the country in removing inefficient taxes that significantly increase the cost of buying a home. Since 2012, we have been reducing stamp duty in the territory, and this will continue throughout this term of government,” ACT Chief Minister Andrew Barr said.
“Our priority through the next phase of stamp duty reductions is to focus on the most affordable end of the housing market.
“This is a further step in our tax reform program and one that encourages an increased supply of housing below the $500,000 threshold.”
|Property price ($)||Without tax reform ($)||2021-22 Duty ($)||Change ($)||Change (%)|
Source: ACT government
Stamp duty will also be reduced by $1040 for any owner-occupier property purchase between $200,000 to $1.455 million in 2021-22.
The announcement forms part of the territory’s 20-year plan to phase out the property tax, which has been underway since 2012.
“If the government hadn’t started this reform back in 2012 … [and it] continued to raise revenue in the same inefficient way, buyers would be paying $20,500 in stamp duty for the same property that will, from tomorrow, permanently have zero stamp duty in the ACT,” Mr Barr said.
“Just across the border in NSW, home buyers are paying up to $17,707 in stamp duty for such a property.”
In NSW, only first-home buyers are eligible for stamp duty exemptions under the First Home Loan Deposit Scheme. Meanwhile, any other buyer would be subject to the property tax.
“By abolishing inefficient taxes such as stamp duty and replacing this revenue with our fairest and most efficient tax base, we are increasing economic activity in the ACT and supporting housing affordability,” Mr Barr added.
“Whether you’re looking to purchase your first home, downsize or upsize, the reduction of stamp duty rates will make it easier to purchase and ensure all Canberrans will benefit from fairer, simpler and more efficient taxes and duties.”
However, according to Allhomes listings, there are only two developments on the market that offer off-the-plan townhouses in Taylor for less than $500,000.
As for off-the-plan apartments, more than 30 developments offer one to two-bedroom apartments under that threshold.
The latest announcement comes after the ACT government announced that it would increase the average household general rates by 3.75 per cent on July 1.