The Australian Capital Territory (ACT) released its budget this month. The key ACT revenue initiatives are:
- From 1 July 2018, transfer duty will be abolished on commercial property transactions of $1.5 million or less. Commercial property transactions greater than $1.5 million will incur a flat 5 percent rate.
- From 1 July 2018, the ACT will amend its first home buyer concession from a property value test to a household income test. Under the change, first home buyers with a household income below $160,000 will not pay stamp duty regardless of the value of the first home. The budget papers state that this is due to grants having an inflationary impact on prices.
- From 1 July 2018, foreign investors who own residential property in the ACT will be liable for a surcharge of 0.75 percent of the property’s average unimproved value, in addition to the applicable marginal land tax rate. The introduction of the surcharge is consistent with most other States, although the rates vary.
- The Government will develop a business intelligence and data analytics compliance program for landholder duty. Details are not yet available.
Developers active in the ACT should consider how the change to the first home owner incentives will impact pricing and recent acquirers of companies or trusts which own land in the ACT can expect a call.