What stamp duty threshold increases mean for your property

Conveyance duty, commonly known as stamp duty, is the tax you pay when you buy property in the ACT, whether it’s a home, land or commercial property. It’s essentially the fee you pay to transfer ownership of the asset into your name.

Since July 2021, the ACT Government has been reducing stamp duty and increasing threshold rates for both residential and commercial properties. The changes to residential rates have received much attention, but commercial properties have also been benefitting from the changes.

As announced in the ACT Government’s 2024–25 budget, from 1 July 2024, commercial properties with a dutiable value of $1,900,000 or less will now pay no conveyance duty. Where the value is greater than $1,900,000, a flat rate of 5 per cent will apply.

Commercial properties include offices, warehouses, factories, restaurants, hotels, caravan parks, shops and mixed-use properties.

Raine and Horne Commercial principal and managing director Mark Nicholls says the July threshold increase has stimulated commercial property investment in many ways.

Mark says small business owners who enter the commercial property market to operate their business from their owned premises could save a significant amount of money.

“If a buyer can save paying circa $80,000 in stamp duty, then this has a big impact on their initial outlay,” Mark says.

“The new threshold set at $1.9 million has certainly stimulated buyer activity for commercial properties in the sub-$1.9 million price bracket. This has ultimately assisted the smaller property investors and business owners to enter the commercial property market,” Mark says.

“Unfortunately for vendors who wish to sell a commercial building that’s worth between $1.9 million to around $2.2 million, it’s proving to be quite difficult to sell due to the majority of offers being set at $1.9 million.”

Mark says one important thing to note is that the threshold is inclusive of any GST that might be applicable.

“If the vendor is GST registered, and the property is sold with vacant possession, then this essentially reduces the threshold from $1,900,000 to $1,727,272,” Mark says.

“But if someone is buying a commercial property with an existing lease in place, then GST is treated as a ‘supply of a going concern’ and is therefore not applicable.”

As the threshold for calculating stamp duty on property continues to change, Velocity Conveyancing director Peter Romano says it is important for purchasers to be informed and up to date.

There are more than 60 categories eligible for the stamp duty concessions in the ACT from 2024, and Peter says when applying for the concessions, it is essential to be as informed as possible when finding out your eligibility.

“It’s important not to play the guessing game. Purchasers need as much accurate information as possible to establish their eligibility,” Peter says.

Peter recommends that when it comes to checking eligibility for concessions, do your research before going to your conveyancer for advice.

“There are plenty of online stamp duty calculator tests you can take to check your eligibility, but it is best to use the ACT Revenue Office one,” Peter says.

“It’s really important to analyse your situation first and foremost, do your research, fill out your forms and make sure to update them if anything changes, from a financial or personal point of view, that might impact your loan repayments or stamp duty eligibility.

“But when it comes to the ongoing fluctuations with stamp duty, it is important to remember what the threshold was when you signed your original contract because that’s what you will be paying regardless of what changes between the day you sign and the day you settle.”

Peter says as long as the prices of property continue to increase, the threshold should continue to increase with it, but that’s for the government to decide.

To learn more about increases in stamp duty and all other conveyancing needs, visit Velocity Conveyancing.

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