Downsizers looking to purchase a newly-built apartment or townhouse in Canberra will save around $10,000 thanks to a decision by the Australian Capital Territory Government to cut stamp duty from today.
The permanent stamp duty cut will apply to off-the-plan home purchases.
In addition, the government has confirmed its existing pensioner stamp duty concession scheme will operate for at least one more year from today, and has increased the price threshold to access the scheme by $50,000.
The ongoing stamp duty changes are part of a broader 20-year land taxation reform in the nation’s capital, whereby stamp duty is being progressively reduced or abolished, while ongoing land rates are increasing. For instance, rates will increase by 3.5 per cent in 2021-22.
By 2032, it’s expected that stamp duty will no longer exist in the ACT.
In a statement, 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.”
With these changes, anyone purchasing an off the plan apartment or townhouse valued at $500,000 will save $10,360.
“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.
“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.”
Off-the-plan scheme
Under the new ACT scheme, there is no stamp duty on off-the-plan apartment and townhouse purchases valued at $500,000 or less, where a contract is exchanged after 1 July.
In addition, at least one buyer must live in the home continuously for at least one year, starting within 12 months of the date of completion (settlement date) of the off the plan agreement
Pensioner stamp duty concession
Separately, from today, the threshold for pensioners to avoid paying any stamp duty will increase from $450,000 to $490,000. This means that a pensioner buying a home valued at $490,000 will save $11,060 in duty.
Also from today, pensioners will receive a discount on their stamp duty payment for properties valued up to $642,000, up from $570,000 in 2020-21.
There are separate threshold increases for vacant land purchases.
General stamp duty cuts
As part of its ongoing stamp duty reform, the ACT Government has also announced it will cut stamp duty across a range of property purchases.
For instance, duty on any owner-occupier purchase between $200,000 to $1,455,000 will be $1,040 lower in 2021-22 than in 2020-21.
Comment from CEO
Downsizing.com.au CEO Amanda Graham said: “In recent years, Canberra has become a hotspot for downsizing and apartment development, particularly linked to the new light rail service."
It is very exciting that the ACT government has given a leg-up to apartment purchasers and has continued and expanded its existing pensioner stamp duty concession.
“This move is a very welcome one as we know that transactional costs like stamp duty are a major barrier to moving for empty nesters and downsizers.
“It’s refreshing to see a government proceeding with reducing stamp duty on property purchases, especially during the current housing price boom.
“Too many State governments have become highly dependent on progressively increasing property taxes rather than actually reducing them.”
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