8 November 2023

Off-the-plan stamp duty concession threshold lifted to $800,000 in boost for home buyers

| Ian Bushnell
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Row of townhouses.

New townhouse and apartment buyers will have more choice with the stamp duty savings. Photo: Michelle Kroll.

More Canberrans buying properties off the plan will no longer have to pay stamp duty on their purchase, with the ACT Government lifting the current $700,000 threshold by a further $100,000.

Properties valued up to $800,000 bought off-the-plan by owner-occupiers will now be eligible for the stamp duty concession.

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The government says this will apply to contracts signed and exchanged on or after 27 November 2023 for off-the-plan apartments or townhouses.

Chief Minister Andrew Barr said this would mean a saving of $22,704 on the purchase of an $800,000 property.

“Previously, the concession – for contracts signed and exchanged from 1 July 2023 – applied to properties valued up to $700,000,” Mr Barr said.

“This expands an important tax initiative that encourages housing supply in Canberra.”

Mr Barr said stamp duty could be a significant barrier to home ownership.

“Further increasing the concession threshold for off-the-plan unit purchases will support more prospective homebuyers, including downsizers, to purchase an apartment or townhouse in Canberra,” he said.

Mr Barr said the change further accelerates the Territory’s 20-year tax reform program, which began in 2012.

“The government has cut stamp duty every year,” he said.

“This is just one of a range of measures we are delivering to increase housing supply, affordability and choice.”

The increased concession threshold aligns with the new stamp duty exemption for dual occupancies on suburban residential blocks announced last month.

This will apply to the first transfer of unit-titled dwellings on suburban residential (RZ1) blocks for purchases valued up to $800,000 from 27 November 2023 to 30 June 2026.

Mr Barr said at the time that this created another incentive to subdivide.

“This incentive provides a discount of up to $25,150 on the final sale price, removing a barrier to home ownership and will bring an incentive for the delivery of more well-located and affordable homes,” he said.

To be eligible, contracts will need to be signed and exchanged on or after 27 November 2023, and at least one buyer must live in the home continuously for at least one year, beginning within 12 months of the date of completion (the settlement date) of the off-the-plan agreement.

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The threshold increase is timely given the Reserve Bank’s decision on Tuesday to raise interest rates again.

The ACT’s tax reform program aims to modernise the Territory’s taxation system and will abolish a number of inefficient taxes, such as duty on property transfers and insurance premiums.

Economists have generally praised the program, but the government has been criticised for allegedly double dipping by upping rates and not reducing stamp duty fast enough and for still reaping larger amounts of revenue from the measure, although that is seen as being due to increased prices during Canberra’s long property boom.

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HiddenDragon8:53 pm 09 Nov 23

“Mr Barr said the change further accelerates the Territory’s 20-year tax reform program, which began in 2012.”

In the period since that program began, the revenues derived from the taxes which have been subject to “reform” have grown by more than half in CPI-adjusted terms.

Even after allowing for population growth, and for a more generous uplift factor than CPI, the ACT government should be able to do somewhat better on stamp duty reductions than tokenistic, el-cheapo efforts such as this.

Why doesn’t the cut also apply to second hand Apartments and Townhouses?
Limiting it to off the plan purchases forces people to wait, risk that the property is delayed, and risk buying a property with unknown building faults etc.
Think about whether the Labor/Green govt might be more interested in propping up the construction industry, than in actually helping people get into a property quickly and with less risk.

You’ve identified the reason yourself. This is not about helping homebuyers, but about helping developers by encouraging people to buy from them to get the stamp duty concession. Of course, it’s really no concession at all as the developer will set the price higher knowing the buyer will have more to spend they’re not paying stamp duty.

This is really a gift to developers, encouraging them to build more homes. Buyers respond to the apparent incentive, which helps developers to sell their developments, guaranteeing their success and more building. The buyer gains nothing despite increased risk in buying off the plan. Established homes are lower risk for the buyer, but don’t increase supply of homes. The government wants to increase supply, so they can claim credit for doing that.

An increase in the off-the-plan stamp duty concession to new apartments and townhouses encourages young first home buyers entering the market Bruce Paine. Rather than flood the market with young people buying in established suburbs, it frees these properties up for the elderly wishing to downsize. Elderly downsizers are the people less likely to move into new suburbs. This then frees up the market for young and expanding families wishing to move into larger homes.

Capital Retro6:48 pm 09 Nov 23

You have it right about where the downsizing elderly want to re-locate. The problem is that there are very few homes in established suburbs that are suitable for them at prices they can afford.

For a start, houses for the elderly need to be single level with no steps. Ambulance and home-care access needs to unrestricted also. A small garden is necessary for most.

This eliminates all home units and most townhouses which are currently being built in the newer suburbs (plus infill).

Additionally, the government provides no incentive for its seniors to downsize. I find it “very off” that first home buyers pay no stamp duty but “last” home buyers still pay the full amount usually after having two or more homes in the ACT that they have already paid full stamp duty on.

I fear that now the Federal Government has signaled that self funded retirees will have to fund their own retirement some will elect to stay at their current home and occupy the ground floor only (for mobility safety). They will also be forced to go on to home care services which are about $1,000 a week.

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