Canberra homeowners will pay on average an extra $153 in rates in the coming year as the ACT government continues its year-on-year rates increases to pay for its gradual abolition of stamp duty.
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The average rates increase this year, like last, is about 10 per cent, although the precise amount will vary for individual homes – higher than average if you’re in a suburb with faster rising property values, and less where values are falling.
Pialligo takes the biggest hit, with the Government’s suburb-by-suburb breakdown showing an average increase of $920 for the enclave, or 35 per cent. The Government said the increase reflected big increases in land values over recent years there.
A rates calculator will not be online until the new rates kick in on July 1, but rates for a house with an unimproved land value of $300,000 rise by $135 to $1590, an increase of 9 per cent.
Rates for a house with an unimproved land value of $500,000 rise by $220 to $2480, an increase of 10 per cent.
People who own a separate rental flat will not welcome news of changes to land tax announced in Tuesday’s budget. If you own an investment property, you will now pay a fixed charge of $900, plus a percentage depending on the unimproved land value.
The measure is designed to move a bigger share of the land tax to people who own apartments rather than houses. When it was based purely on land value, without a fixed charge, apartment owners paid considerably less. The measure will also bring in an extra $10 million a year for the government. Land tax comes on top of rates.
The new rates are:
- for an unimproved land value of $150,000, land tax of $1568
- for an unimproved value of $250,000, land tax of $2178
- for an unimproved land value of $350,000, land tax of $3257
People buying a home, though, will welcome cuts across the board to stamp duty as part of the Government’s program begun in 2012 to gradually reduce stamp duty. New rates are:
- on a $300,000 home, stamp duty from today is $4000, a cut of $1500 since 2012
- on a $500,000 home, stamp duty from today is $15,800, a reduction of $4700 since 2012
- on a $750,000 home, stamp duty is $28,300, a reduction of $6575 since 2012.
And for people aged 60 or older, stamp duty is effectively abolished for houses costing up to $595,000.
Property council executive director Catherine Carter noted the increases not only for homeowners, but also for commercial ratepayers and the increase in land tax.
“The sharp increases in general rates casts doubt the credibility of the ACT’s 20-year tax reform program,” she said.
“Equity needs to be at the centre of genuine tax reform. Excessive taxation on property owners and business operators will limit private investment, particularly in property.”
Master Builders executive director John Miller broadly backed the budget, saying the incentives for baby-boomers to downsize their homes would be a shot in the arm for the industry. But he said the challenge of the returning to surplus could not be underestimated, especially as it partly relied on tax measures, including the rates and ratcheting up land tax “which could undermine the good work of this budget”.
Click or touch on your suburb to see average rates and how much they have increased since last year.
Choose a region to see rates in those suburbs.
