- Stamp duty exemptions for off-the-plan units and apartments in the ACT have been extended.
- The maximum value will go up from $700,000 to $800,000 on 27 November.
- The ACT Government is also changing zoning laws to try to boost housing supply.
- Critics say it would be better to just remove stamp duty entirely.
For contracts signed on or after 27 November, the upper price limit for the stamp duty concession will be increased from $700,000 to $800,000.
According to the Infochoice stamp duty calculator, that means someone spending $800,000 on a newly constructed unit in Canberra will be saving up to $22,704.
To be eligible for the concession, at least one buyer will need to live in the property continuously for one year, starting within 12 months of settlement.
According to SQM Research the asking price of an average unit in Canberra is a touch over $602,000, up 6.1% compared to 12 months ago and the second-highest capital city behind Sydney.
Chief Minister Barr said the ACT Government wants to support more Canberrans buying property, with stamp duty often a "significant barrier" to home ownership.
"Since tax reform commenced in 2012, the Government has cut stamp duty every year," Mr Barr said.
Before March 2022, the stamp duty concession threshold for owner occupied off-the-plan unit purchases was $500,000, but it increased to $600,000 in April '22, then $700,000 in July '23, before this latest extension.
The move to $800,000 lines up with the ACT Government's announcement in October that stamp duty exemptions will apply on the first transfer of newly subdivided unit titled properties in RZ1 areas (suburban zones, low rise and low density housing) where the dutiable value is less than $800,000.
Are concessions far enough?
Simon Pressley, Head of Research at Propertyology, criticised the ACT changes, calling it a measure focused solely on supporting the construction sector instead of homebuyers.
"If these clowns genuinely cared for the homeowner, the concession would be available for any property of the buyer’s choosing, not just a select few," he told Infochoice.
"Waiving stamp duty to entice a consumer to ignore 98 percent of their options is bloody reckless."
He says instead of extending concessions, the "toxic" tax should be abolished entirely, Australia wide.
"The stamp duty model...takes far too much money from so few people while simultaneously locking out millions of others from achieving life's biggest goals," he said.
He says the upfront lump sum tax of stamp duty is a huge barrier for Aussies looking to buy a home, and suggests replacing it with a 3% housing levy on everyone in the workforce.
"Instead of raising $35 billion per year from charging less than 5% of Australian households with a $30,000 to $80,000 handling fee, it would be much more sustainable to charge 11.5 million households an annual housing levy of 3% of their gross income, similar to the Medicare levy," Mr Pressley said.
This could mean more young people can buy their first home sooner, as well as improved household mobility which translates to more property transactions and listings, boosting supply.
However this would introduce a homebuyer cost impost on those who decide not to purchase or who choose to rent.
Eased zoning restrictions in ACT to improve supply?
The incoming Territory Plan, which also commences on 27 November, includes other changes aimed to make subdivision in RZ1 areas easier.
Any block in an RZ1 zone over 800 square metres (sqm) can have a second dwelling built on it, up to 120 sqm, which can then be unit titled and individually sold.
From the 27th, lessees of land to be developed will also be able to choose how the lease variation charge (LVC) is calculated.
LVC is levied on the increase to the value of land that will come after a lease holder is given permission from the government to develop on.
The LVC can either be worked out based on the definition under the Planning Act 2023, where the Treasurer determines the charge based on advice from an accredited valuer (a standard charge variation), or by taking 75% of the potential value uplift as measured by a valuer (a non standard chargeable variation).
Minister Barr says the lessee can pick between the "certainty of the codified values or the flexibility to seek a bespoke valuation to test the value uplift."
"Both the stamp duty exemption and LVC changes will support the development of more dual-occupancy homes in our suburbs, providing more opportunities for Canberrans to find a home."