15 March 2022

ACT Government dumps stamp duty on off-the-plan properties up to $600,000

| Lottie Twyford
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Apartments and townhouses

The ACT Government has extended its stamp duty cuts to include off-the-plan property purchases up to the value of $600,000. Photo: Michelle Kroll.

The ACT Government has further expanded its stamp duty cuts, meaning buyers who purchase off-the-plan properties up to the value of $600,000 could save more than $15,000.

This builds on an announcement made last year that scrapped stamp duty for purchases up to the value of $500,000. Chief Minister and Treasurer Andrew Barr has already signalled further annual changes are on the way as his government pursues ambitious reform of “inefficient taxes”.

Mr Barr said the measure is intended to help ease some of the pressure currently keeping many out of the housing market after a period of rapid price growth coupled with record low-interest rates.

“On the supply side, it’s a signal to build more properties under $600,000,” he said.

While that figure may seem low, Mr Barr was clear there “is the product available”, such as townhouses and units, in areas such as Tuggeranong, Woden, Belconnen, Gungahlin and Molonglo Valley.

“But we would like to see more, and that’s one of the reasons why this measure is targeted … at new housing. So it’s not chasing existing housing stock, it’s requiring new housing to be built,” he explained.

“This should be a very strong signal to industry that they’ve got to build more houses.”

READ ALSO Would increasing land supply solve the ACT’s housing woes?

As well as targeting those entering the property market for the first time, Mr Barr is hopeful pensioners and others looking to downsize from a family home to a unit or apartment will benefit, along with growing families that can take the larger homes.

He described it as leading to what economists describe as ‘allocative efficiency’.

“You get a better mix of people in the right type of housing to suit their stage of life,” Mr Barr explained.

That could be young people moving from a one-bedroom to a two-bedroom property or people looking to downsize but remain in their area.

Some, however, are calling for yet more to be done to meet some of the demand for housing in the ACT, particularly after a recent ballot where 12,300 registrations were received for only 71 blocks of land.

Michael Hopkins

MBA ACT CEO Michael Hopkins said the government needed to look at cutting stamp duty on purchases of vacant land for detached houses as well. Photo: Region Media.

Master Builders ACT (MBA ACT) CEO Michael Hopkins said while he was pleased to see the government extend its duty cuts, it wouldn’t be enough to fulfil the demand for affordable housing.

“To provide equity across the new residential market, stamp duty should be cut for all residential purchasers, including vacant land for detached houses,” he said.

Mr Hopkins said the government was also constraining the supply of vacant residential land for detached housing, leading to significant price increases.

“Providing an adequate supply of affordable land for detached housing should be a priority of [the] government and cutting stamp duty would provide immediate relief for purchases,” Mr Hopkins noted.

Mr Barr, who has previously hit back at calls for the government to simply release more land to solve housing issues, said earlier this week (Tuesday, 15 March) the problem is that Canberra simply cannot sprawl outwards forever.

“There are obvious geographic boundaries, we can’t develop in our water catchment – that would be insane – and there are massive costs associated with endless urban sprawl,” he explained.

READ ALSO Aspen Village a game changer for revitalised Tuggeranong Town Centre

The Canberra Liberals described Mr Barr’s announcement as a “policy that looks good on paper” but will benefit no one.

Opposition Leader Elizabeth Lee said the policy was unlikely to have an actual impact on many, given most first-home buyers are already exempt from paying stamp duty anyway.

“What we are calling for is the [ACT Government] to take seriously the absolutely huge concerns about housing affordability. We know that Canberrans are wanting choices when it comes to housing – not just being restricted to high-rise, multi-dwelling apartments,” Ms Lee said.

Mr Barr, however, said the extension of the stamp duty cut was only one way the government was addressing housing issues.

Others included continuing to attract build-to-rent investments, partnering with the community housing sector on below-market rental projects and the delivery of public housing growth and renewal program, he said.

The new duty-free threshold will take effect from 1 April 2022.

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Still pushing your pyramid scheme? Lol 10 signatures is about right – the number of Canberras finding that housing affordability is an issue for them.

More pretending to care about the cost of housing announcements from the ACT government that barely make a scratch on the price appreciation in the last year. Build to rent is a ACT government give away to corporate landlords. According to housing researcher Dr Cameron Murray, build to rent in the Gold Coast and Sydney has resulted in homes being left vacant deliberately to keep rents up and rents 10-30% above market rate. Dr Murray explains that “This is what tax breaks on GST and land tax to encourage BTR landlords are going to deliver.”

HiddenDragon7:05 pm 16 Mar 22

“Andrew Barr has already signalled further annual changes are on the way as his government pursues ambitious reform of “inefficient taxes”.”

Ambitious reform of inefficient spending and regulation by this government would do far more to make housing (and many other things) more affordable in this town than its dilettante tinkering with rates and stamp duty.

As to the mention, further on in this article, of “allocative efficiency”, if Andrew Barr truly believed in that concept, he would call on the federal parliament to replace the current model of ACT self-government with one which entails far less expenditure on wasteful, duplicative, state-level bureaucracy in a town of a size which, at best, would amount to a regional/area administration in a larger state. A somewhat less costly bureaucracy would have that much less need to bleed home buyers and owners to sustain itself.

The waiving of stamp duty was not delivered on by the ACT Govt back around 2020 after thousands had only bought their house off the plan for the very promise of no duty. You can’t fail to uphold your promises then expect anyone to trust you. Additionally, what off the plan properties are currently available for under $600k?

There are plenty of apartments under $600k. First home owners need to temper their expectations.

Capital Retro3:19 pm 16 Mar 22

The “concessions” are directed at off the plan stuff in an attempt to avoid what is happening all over Australia right now.

https://www.news.com.au/finance/business/condev-construction-to-enter-liquidation-in-another-major-industry-collapse/news-story/4c574dbb808da84d73897b84eb894eb8

Capital Retro5:25 pm 16 Mar 22

For those readers who are too young to remember, there was a company formed in Sydney in 1961 called Mainline Corporation Limited. Its founder was Richard (Dick) Baker and over the next 10 years the then publicly listed building company completed many of the biggest and most iconic city office buildings all over Australia.

They even purchased land in Canberra in 1971 and in 1972 built the then Lakeside Hotel (now QT Canberra).

Economic conditions changed ( due to an old device called a “credit squeeze”) and in 1974 the unthinkable happened with the darling of the building industry being placed into administration and then liquidated to pay creditors.

The point I am making is that no one in the building industry is “too big to fail”.

Yep, the Canberra City Council are doing the minimal amount to be seen to be doing something. This will have relatively little impact on new housing given the price of materials, land and tradespeople. As for people downsizing, for some people this might mean something the size of a wheelie bin given the size of most new units.

No stamp duty up to purchase price up to $600,000. Well you certainly can’t buy much for that that’s decent these days. Should be at least $750,000

There are plenty of apartments under $600k. First home owners need to temper their expectations.

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