ACT Stamp Duty Changes Explained

Changes to conveyance duty (commonly known as stamp duty) in the ACT are helping to make housing more affordable — and not just for first home buyers.

From 1 July 2021, owner-occupied off-plan property up to $500,000 is duty-free. For established homes, conveyance duty will be reduced for all homes up to a value of $1,455,000.

“This is a real boost for owner-occupiers,” says Paul Corazza – Principal and Licenced Agent at Independent Property Group.

No stamp duty for most off-plan properties

Stamp duty has been abolished for off-plan apartments and townhouses valued at $500,000 or under. This applies to all owner-occupier buyers of off-plan properties, from first home buyers to downsizers.

For a $500,000 property, this represents a saving of $10,360.

To be eligible:

• You (or at least one buyer if the purchase is in joint names) must intend to live in the property for at least 12 months after settlement;

• The contract must have been exchanged on or after 1 July 2021

• The value of the property must be less than, or equal to, $500,000

This duty is an extension of the Government's stamp duty reduction as a temporary stimulus during the height of the COVID-19 pandemic. If you exchanged contracts on an off-plan property between 4 June 2020 and 30 June 2021, transitional provisions applied in the following ways:

• For properties worth less than $500,000, no stamp duty is payable

• For properties worth between $500,000 & $750,000, buyers are entitled to a stamp duty reduction of $11,400.

Reduction in stamp duty for owner-occupiers

If you’re buying an established property, you can also benefit from the latest duty changes. From 1 July 2021, eligible owner-occupier buyers will see significant reductions in the amount of conveyance duty payable.

For purchases between $200,000 and $1,455,000, conveyance duty is reduced by a flat rate of $1,040.

Longer-term: what’s happening to conveyance duty?

The changes are part of a longer-term strategy being introduced by the ACT government to abolish conveyance duty altogether. In 2012, the Government commissioned a review by former Treasurer, Ted Quinlan into the Territory’s tax

system. The Quinlan review recommended a gradual shift from conveyance duty to land-based taxes.

The government committed to a series of reforms over 20 years to abolish conveyance duty altogether by 2032.

To compensate, the Government has increased household rates over the past 10 years, with rises estimated to be around 3.5% in 2021-2022. This new scheme intends to be cost-neutral, with future rate rises balancing out against the loss of revenue from stamp duty. The government intends that the rate rises will decrease in the latter years of the reform.

Household rates are made up of both a fixed and variable charge. The fixed charge component being:

• $800 per year for residential land

• $850 per year for residential units

The variable charge is more complicated. It is based on an averaging of the property’s unimproved value over several years. To calculate the rates on your property, or get more information, you can use the ACT Revenue Office calculator.

Do the changes go far enough?

The reforms are a welcome relief for many new home buyers, especially those buying off-plan. A saving of over $10,000 on conveyance duty can make a huge difference to your budget and might make all the difference to those looking to get into the property market.

Paul Corazza would like to see the reforms go further. “We support the changes, which will make housing more affordable for Canberra buyers, and we’re looking forward to seeing stamp duty disappear altogether by 2032. In our view, expanding the changes to apply to investment property would be an extremely positive development. It would encourage investment in Canberra real estate and help address the worsening rental crisis.”

Looking at buying off the plan? With Stamp Duty Savings now in place, there has never been a better time! Browse our range of Developments here.