Canberra expands exemption for off-the-plan stamp duty

• Stamp duty will be waived for off-the-plan homes worth up to $800,000.
• This is a $100,000 increase on the current property price cap.
• Master Builders ACT CEO, Michael Hopkins, responds.

Canberran homebuyers will not have to pay a stamp duty fee for an off-the-plan apartment or townhouse valued up to and including $800,000.

Previously, the concession applied to purchases of up to $700,000. The $100,000 increase means homebuyers will get to keep $22,704 on the purchase of an $800,000 property.

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

In 2021, off-the-plan apartments and units were exempt from the stamp duty if valued at $500,000 or less. The threshold has expanded considerably since then.

ACT Chief Minister’s statement

“Stamp duty can be a significant barrier to homeownership,” said Australian Capital Territory (ACT) Chief Minister, Andrew Barr.

“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.”

Barr added that this move is part of Canberra’s tax reform program. The program is a 20-year endeavour to modernise the Territory’s taxation system, which aims to abolish inefficient and inequitable duties.

“Since tax reform commenced in 2012, the Government has cut stamp duty every year,” he said.

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

According to Domain‘s October property market update report, Canberra is the third most expensive unit market in the country, with a median price of $567,059.

The median price of houses and units, September quarter 2023

Source: Domain.

Master Builders ACT’s and UDIA respond

According to Master Builders Association (MBA) ACT CEO, Michael Hopkins, this latest announcement is not a step out of line with Canberra’s tax reform announcement from 2012.

“While Master Builders broadly welcomes these changes, we would like to see them go further; to increase it beyond $800,000.”

Michael Hopkins, MBA ACT CEO

Hopkins added that government taxation has largely favoured owner-occupiers and that more incentives need to be directed towards investors.

“Investors often build housing which is rented, and the ACT needs affordable rentals as much as it needs affordable housing for purchase,” he said.

Hopkins said that the ACT is experiencing a very high population growth like other parts of the country, and to do its part to help deliver 1.2 million homes in the next five years, all the stops need to be pulled out to ensure supply is pouring into the local market.

“Our position would be that the Government shouldn’t be too constrained and conditional in these incentives and that it’s not a time for half measures.

“We would encourage the Government to be bold in their reforms.”

“Stamp duty exemptions for off-the-plan apartments and townhouses further supports off-the-plan sales in the ACT, which are needed to secure the development financing and proceed with construction, strengthening the housing pipeline in the ACT,” said UDIA New South Wales (NSW) CEO, Steve Mann.

Mann added that the ACT Government should ensure all measures to boost the housing supply across the state.

“This is critically important as affordability (purchase, price and rent) are the worst they have ever been in Australia and as all states and territories seek to meet the Federal Government’s bold ambition of 1.2 million homes over the next five years under the National Housing Accord.”