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ACT Budget Eliminates Stamp Duty for All First-Home Buyers

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ACT Government Abolishes Stamp Duty for First-Home Buyers in Landmark Budget

The ACT Government has announced in its budget the abolition of stamp duty for all first-home buyers, effective July of this year. The reform applies regardless of the property's value or the buyer's income. The measure is part of a broader 20-year tax reform program aimed at eliminating stamp duty on all house sales.

Key Provisions

The new policy includes the following components:

  • First-Home Buyers: Stamp duty is eliminated for all first-home buyers with no means testing or property value cap.

  • Pensioners and NDIS Participants: The stamp duty exemption is extended to pensioners and eligible National Disability Insurance Scheme (NDIS) participants.

  • Past Property Owners: The exemption also applies to home buyers who have not owned property in the past five years.

  • New Unit-Titled Properties: Stamp duty will be removed on all new unit-titled properties purchased by owner-occupiers.

  • Off-the-Plan Concessions: The off-the-plan stamp duty concession has been expanded to include newly constructed units not initially sold off-the-plan.

Revenue Impact

The government estimates the policy will result in approximately $17 million in forgone revenue in the first year, with this figure increasing slightly each subsequent year.

Background and Context

Previously, a means-tested stamp duty exemption applied to properties valued up to $1,000,020, offering a maximum saving of nearly $37,000.

The overall median home price in Canberra is reported as $890,000, while the median price for standalone houses is $1,040,000.

Statements from Officials and Analysts

Chief Minister Andrew Barr described stamp duty as an "inefficient and unfair tax."

Treasurer Chris Steel stated the government chose not to means-test the reform to maximize home ownership. He characterized stamp duty as "neither efficient nor fair" and noted the change is intended to support downsizers, which could free up larger homes for families.

"Reducing the upfront barrier should stimulate market activity and encourage older homeowners to downsize, without necessarily driving up prices." — Property lawyer Andrew Satsias, Velocity Conveyancing Group

Property lawyer Andrew Satsias of Velocity Conveyancing Group called the abolition a "game-changer" and one of the most significant incentives in over a decade. He stated that reducing the upfront barrier should stimulate market activity and encourage older homeowners to downsize, without necessarily driving up prices.

Additional Housing Measures

The budget includes several other housing-related policies:

  • Lease Variation Charges: The government will temporarily halve the lease variation charge to encourage the development of townhouses, terraces, and low-rise apartments.

  • Housing Supply Target: The government pledged to deliver nearly 26,000 new homes over the next five years under its Housing Supply and Land Release Program.

Future Considerations

Treasurer Chris Steel declined to specify whether rates will increase significantly to compensate for the lost revenue from stamp duty, stating that rates increase every year.