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The ACT’s government will introduce a new stamp duty exemption for dual occupancy homes on suburban residential blocks to progress housing choice, access and affordability across the territory.
It revealed the stamp duty exemption will apply to the first transfer of unit-titled dwellings on suburban residential blocks (RZ1) for purchases up to $800,000 from 27 November 2023 to 30 June 2026.
The government stated that as part of its Territory Plan, it will allow dual occupancy developments on large blocks. As such, any block of land over 800 square metres in an RZ1 zone would be able to accommodate a second dwelling up to 120 square metres in size and be able to unit title that second dwelling, enabling it to be individually sold.
To support the development of additional dual occupancy dwellings in Canberra, the government said it is also introducing changes to the lease variation charge (LVC) – a windfall gains tax.
The LVC has been in place in the ACT since 1971 and is levied on any increases in the market value of land arising from an improvement in development rights contained in a Crown lease purpose clause.
The territory government said the principle behind the LVS is that the community should share the benefit from any increase in the value of the land arising from changes to the original Crown lease granted by the government.
From the time the government’s Territory Plan commences to 30 June 2026, the government will give lessees the choice of how the LVC is calculated for maximum number of dwelling lease clauses on RZ1 blocks, either the codified values or 75 per cent of the value uplift as measured by an accredited valuer.
A statement from the Chief Minister of the ACT, Andrew Barr, said: “This will put the choice in the hands of the lessees as to whether they prefer the certainty of the codified values or the flexibility to seek a bespoke valuation to test the value uplift.”
It added that both the LVC changes and the stamp duty exemption will support the development of more dual occupancy homes in the territory’s suburbs, providing the public with more opportunities to find a home.
The stamp duty alteration by the ACT came after the South Australian government scrapped stamp duty for first home buyers who purchase a new home.
First home buyers in South Australia who purchase a home valued up to $650,000, or vacant land up to $400,000 to build a new home, no longer need to pay stamp duty.
The state government said the changes were part of encouraging the supply of new housing and taking pressure off its tight rental market rather than increasing demand for existing homes.
At the time, South Australian Premier Peter Malinauskas stated: “We’ve already announced the state’s largest-ever land release, significant reforms for renters and the first increase in public housing in a generation.
“Everyone deserves a home. Now, we’re taking the next step so that more people can own their own home.
“These reforms will slash almost $45,000 off the cost of an average new home for a first home buyer – making it easier for them to enter the market and cheaper for them to pay their mortgage.”
[Related: SA abolishes stamp duty for FHBs buying new homes]
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