Stamp duty changes in the ACT from 1 July 2019
You may be aware that the ACT Government is introducing changes to the payment of stamp duty in the ACT from 1 July this year. But, what exactly will be changing from the current stamp duty regime?
Home Buyer Concession Scheme
The current Home Buyer Concession Scheme will be amended from 1 July 2019 so that the concession will be available to both new and established dwellings and there will be no property value threshold.
This means that eligible first home buyers will no longer be required to purchase a new dwelling or vacant land for the concession to apply and will obtain the concession regardless of the value of the property. This will apply to Contracts exchanged after 1 July 2019.
First home buyers will, however, still be required to meet all of the following eligibility criteria:
- The buyer must be over 18 years of age (or a lower age if approved in individual circumstances at the Commissioner for Revenue’s discretion).
- The total gross income of the all buyers and their domestic partners (if any) in the financial year prior to the transaction date (the Contract date) must be under the total gross income threshold amount. The threshold amount is based on a sliding scale beginning at $160,000 for single people or couples with no dependent children.
- All buyers and their domestic partners must satisfy the current and previous property home ownership test. This means that they must not have held a legal or equitable interest in land within the two years prior to the contract date.
- At least one buyer must occupy the property as their principal place of residence for a continuous period of at least one year beginning within twelve months of settlement of the transaction.
As the relevant duty determination has not yet been released, some of the detail of the above may change between now and 1 July 2019.
The change to stamp duty coincides with the ACT Government abolishing the first home owners grant. This means that first home buyers purchasing a new dwelling or vacant land below the existing thresholds (and who otherwise satisfy the eligibility requirements) will be able to obtain the first home owners grant only if the Contract is exchanged on or before 30 June 2019.
Changes to the rate of stamp duty
The ACT government has also released the Taxation Administration (Amounts Payable – Duty) Determination 2019 (No 1) (the Determination). The Determination sets the amounts payable for stamp duty (where no concession applies) from 1 July 2019 for residential and commercial property in the ACT.
The rate of duty payable for residential property has decreased across the board, meaning that all those who are not eligible for a stamp duty concession will pay less duty for contracts exchanged after 1 July 2019. The size of the duty reduction will depend upon the purchase price of the particular property in question.
There has been no change to the rates of duty payable for commercial property, where no duty is payable for property with a dutiable value less than or equal to $1.5 million and $5.00 per $100 is payable for property with a dutiable value greater than $1.5 million.