The ACT's new five-year tax plan shifts the pain to apartment owners, who will see the biggest hikes in tax from July next year, at an average 20 per cent. They will face another substantial hike the following year, as the government shifts a bigger share of rates to units and apartments.
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Owners of free-standing homes will face rates bills rising at an average 7 per cent a year over the five years, after a one-off slowdown this year leading into the election.
From July 2017, apartment and unit rates bills increase an average of $230 – about $80 of which is the across-the-board 7 per cent rise, and $150 of which is the result of a new way of calculating their rates. The following year, they face a $200 increase.
The increases come on top of the average rates bill for unit owners of $1150, which compares with the average rates bill for owners of free-standing homes of $2150.
Chief Minister and Treasurer Andrew Barr said the government was correcting "an imbalance".
"We have a situation where a unit that might sell for $1 million pays significantly less rates than a house in an outer suburban area at half the value, so we think there's a measure of fairness that needs to be applied," he said.
"In the context of the changing demographics of Canberra, the fact that a significant proportion of new housing particularly in inner areas and around or town centres will be townhouses and units, it is appropriate that there is a more even balance in terms of the distribution of the rates burden."
The other big change to rates is a decision to split commercial and residential rates, which will be calculated differently. Commercial rates will rise at an average 6 per cent a year.
Overall, the government is continuing its shift from stamp duty to rates, but slowing it down. It had planned rates increases of about 9 per cent a year; now they're 7 per cent a year.
As for stamp duty, Mr Barr says it will be cut in every budget. But it is clear the cuts are slowing. From Wednesday, the stamp duty on a $500,000 house will be $13,460. From next July, it will be $660 less, at $12,800.
For a house worth $750,000, stamp duty is $25,960 from Wednesday, and $1210 less next July.
And for a $1 million house, stamp duty is $42,200 from tomorrow, dropping by $1700 in a year's time.
The big change is for commercial property sales worth less than $1.5 million, on which stamp duty will be halved next year and abolished the year after.
For properties above that value, a flat rate of 5 per cent stamp duty applies, and Mr Barr said on Tuesday that rate would continue for five years and probably for longer.
"My intention will be to work hardest and fastest on phasing out stamp duty for residential property but doing so from the bottom half of the housing market up," he said.
"Over the next decade it is certainly going to be the case that there will still be stamp duty on large commercial property transactions and on multimillion dollar houses, so I would think of it in terms of it being a luxury tax during the transition phase. The last stamp duty to be cut will be high-end commercial properties and your multi-million-dollar mansions."
For the "overwhelming majority of residential property transactions" stamp duty would be gone by the early 2030s, he said.
The budget papers calculate changes for the first five years of tax reform, saying stamp duty and insurance taxes were 24 per cent of ACT-sourced revenue in 2011-12; in 2016-17 they are 16 per cent.
Rates were 18 per cent of revenue five years ago; now they're 27 per cent, the largest single source of revenue.
