The ACT Government has announced new stamp duty concessions to help build confidence within the residential property sector. Photo: Region Media.
Stamp duty for eventual owner-occupiers will be reduced to zero for new land single residential blocks and for off-the-plan apartments and townhouses up to $500,000 under stamp duty concessions announced today by Chief Minister and Treasurer Andrew Barr.
The amount of stamp duty paid on off-the-plan apartments and townhouses between $500,000 and $750,000 will be reduced by $11,400.
Mr Barr said the concessions will come at a cost of $10 million and will help create jobs and economic growth within the residential property construction sector in response to COVID-19.
The stamp duty concessions will be in place from today (4 June) until 30 June 2021 for any purchase during this period, and contracts exchanged after the 30 June cutoff will not be eligible. From 1 July 2021 the stamp duty on a $300,000 house will revert to $4,600 while a $500,000 residence will have an $11,400 duty imposed.
The Pensioner Duty Concession Scheme, which provides a full or partial stamp duty concession to houses under the median property value, will also be extended for one year. Pensioners can choose to defer their stamp duty regardless of the property’s value.
However, Mr Barr has ruled out reverting to first home buyer grants after moving to the Home Buyer Concession Scheme from 1 July 2019.
“The experience across the country is that direct cash grants for property purchases inflate prices, becoming a financial benefit to the seller rather than the buyer,” a spokesperson for the Chief Minister said.
“Ultimately, there is not much point in governments giving buyers a cash grant and then taking it back in stamp duty. A far more effective policy response is to cut stamp duty.”
Prior to the changes, a first home buyer purchasing a new or substantially renovated home would receive a $7,000 grant for properties under the value of $750,000.
It was then replaced by the current Home Buyer Concession Scheme where buyers who have not owned a home in the last two years will not pay stamp duty on any property if they earn under $160,000.
First home buyers who purchase a property under $370,000 would receive a stamp duty waiver of less than the original $7,000, but the Government says any form of homeowner grant would only increase house prices and not impact affordability.
Canberra Liberals’ leader Alistair Coe said the ACT Government should freeze rates to make the cost of living more affordable for Canberrans.
“The Canberra Liberals’ rates freeze guarantee will reduce cost-of-living pressures on Canberra families and households,” he said.
“Labor is responsible for tripling rates and making housing unaffordable.”
Mr Coe has previously promised to boost the supply of residential land in the ACT to drive down prices and stop potential home buyers crossing the border.
“The rapidly growing town of Googong has similar-sized detached housing blocks to those on offer in Canberra, but at much lower prices,” he told the National Press Club in October last year.
“At the heart of this is the ACT Government policy of strangling the supply of land for standalone dwellings even though nine in 10 people in Canberra aspire to live in a house and not an apartment.”
Today’s measures have foreshadowed another Federal Government stimulus package which will focus on the residential building industry and possible direct cash grants for home renovations.
An announcement is expected in the coming days.
The ACT Government has also flagged further stimulus and support for community and social housing as well as investment in Government capital projects over the coming weeks.
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