The Australian Capital Territory Government delivered its Budget on Tuesday, 27 June 2023 and announced changes to rates and thresholds for betting operations tax, conveyance duty, lease variation charge, utilities network facilities tax and payroll tax.
Changes to Conveyance Duty (stamp duty) for home buyers
A noteworthy component of the budget entails the ongoing conveyance duty tax reforms, aligning with the ACT government's broader tax reform agenda. The primary objective is to improve the stability and predictability of the ACT’s revenue base by transitioning from transaction-based taxes, such as conveyance duty, to a more comprehensive land tax framework.
Key measures include:
Conveyance Duty Rate Reduction: The budget continues the reduction of the conveyance duty rate. For the fiscal year 2023-2024, the lowest owner-occupier conveyance duty rate will decrease from 0.6% to 0.49%.
Owner Occupier Concession Threshold Adjustment: Effective July 1, 2023, the property price threshold for owner-occupier (off-the-plan) conveyance duty concessions will increase from $600,000 to $700,000. This change aims to provide relief to home buyers.
Build-to-Rent and Affordable Housing Project Fund:
An ambitious housing agenda is at the forefront of this budget, with an additional $345 million allocated to housing measures. A pivotal initiative is the establishment of the Affordable Housing Project Fund, dedicated to augmenting the social and affordable housing inventory in the ACT. This fund encompass:
Ginninderry Women’s Housing Initiative: A grant of $4.5 million for this Build-to-Rent-to-Buy pilot program is a significant inclusion. This initiative seeks to empower women with housing solutions.
Additional Build-to-Rent Projects: Three projects resulting from submissions through the 2022-23 Build-to-Rent Request for Proposal (RFP) process will be supported, collectively delivering around 180 new affordable rental dwellings for low-income Canberra households. a grant of $4.5 million dollars for the Ginninderry Women’s Housing Initiative, a Build-to-Rent-to-Buy pilot program;
Subject to successful negotiation of funding, these projects will deliver around 180 new affordable rental dwellings for low -income Canberra households.
The ACT Government is also providing around $6 million in funding from the 2022-23 Budget initiative Maintaining and growing affordable housing – Lease variation charge discount to Build-to Rent for community housing projects to support community housing providers.
In furtherance of the affordable housing agenda, the ACT Government is committed to promoting the land tax exemption scheme, aimed at bolstering the supply of affordable rental properties.
Beyond housing-related measures, the budget introduces other taxation adjustments:
Lease Variation Charge: Effective July 1, 2023, there will be an increase in the lease variation charge, specifically when leases are modified to permit new or additional development. This charge will rise to $40,000 per dwelling, with incremental increases to $55,000 per dwelling over the next five years.
Payroll Tax Surcharge: Commencing on July 1, 2025, a payroll tax surcharge will be applied to Territory wages exceeding the payroll tax threshold:
o 25% for businesses with $50 million or more in Australian wages; and
o 5% for businesses with $100 million or more in Australian wages; and
Betting Operations Tax: From July 1, 2023, the rate of betting operations tax will increase from 20% to 25%, generating additional revenue for the ACT government.
If you’d like to discuss the changes outlined in this article and what they might mean for you, please contact our office for a private consultation.
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*
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