First home buyers in the ACT will no longer have to pay stamp duty, the territory government will reveal, as it hands down a budget mired in debt.
Housing is central to Treasurer Chris Steel’s second budget, to be unveiled on Wednesday.
The latest milestone in ACT Labor’s long-term project to abolish stamp duty in favour of higher property rates will extend the exemption to all first home buyers from July 1.
Currently, only homes under $1 million are exempt and purchasers must be below income eligibility thresholds.
The ACT will become the first jurisdiction in Australia to fully abolish stamp duty for people entering the property market.
“The elimination of stamp duty for first home buyers compliments the federal government’s tax reforms by supporting younger generations of Canberrans to own their own home,” Mr Steel said.
Stamp duty will also be exempt for pensioners, some National Disability Insurance Scheme recipients and anyone who has not owned a property for five years.
It complements a suite of policies aimed at boosting housing supply and home ownership.
A temporary reduction in the ACT lease variation charge, which levies developers for the increase in value resulting from a building approval, will lower overall development costs and encourage builders to bring forward more projects, Mr Steel said.
Recent “missing middle” reforms allowed more low-rise housing, such as terraces and townhouses, across large swathes of Canberra in a bid to boost supply by 30,000 new homes by the end of 2030.
The ACT will also follow NSW in introducing a pattern book of pre-approved plans, which will enable builders to access faster approvals if they use the designs.
“Together, these reforms open the door for more renters to become owners, support younger households to build their future in Canberra, and ensure our tax system works better for the next generation,” Chief Minister Andrew Barr said.
The cost of the expanded stamp duty exemption has yet to be revealed.
In his mid-year budget update in February, the treasurer forecast the ACT deficit to shrink from $499 million this financial year to $80 million in 2026/27.
But the territory’s net debt was projected to grow from $11 billion to $12.8 billion.
Much of the territory’s infrastructure pipeline has been put on ice in the search for savings.
The new Northside Hospital will set the budget back $1.3 billion over seven years and has been identified by the government as its largest infrastructure priority for the rest of the decade.
It leaves other projects like the light rail extension to Woden up in the air.
While the budget does include $15 million for some lighting and lift upgrades at GIO Stadium, footy fans could be waiting a while yet for their long-promised new arena.