Up to 2000 first home buyers are expected to save on stamp duty when it is abolished on July 1.
Real estate agents are expecting a swing in the market when stamp duty is abolished for first home buyers - but the commensurate hit to rates and land tax is scaring away investors.
The concession, announced in the 2018 budget, will replace the first home owner grant, which gave up to 1300 households a year $7000 towards a newly built or substantially renovated property.
It will also supersede the old home buyer concession scheme, where first home buyers paid no stamp duty on new properties under $470,000.
However the exemption will be means-tested, with only buyers with a gross household income of less than $160,000 able to have their stamp duty waived.
LJ Hooker Belconnen principal Dennis Vlandis said he had dealt with first home buyers delaying their purchase to take advantage of the incoming scheme.
"Even when they're at the auction registered to bid they've withheld and told us they're actually waiting for July 1 to make that buying decision, even at the auction they're just waiting to see if the bidding is at a level that would entice them to buy," Mr Vlandis said.
But Mr Vlandis said buyers may end up paying more if they wait for July 1.
"If you're in a position to get a concession now, you should buy now. If everyone accepts the herd mentality it will push prices back up and what you save in stamp duty you pay back with much higher prices," Mr Vlandis said.
LJ Hooker's Sandra Masters said while a handful of buyers were holding off, most saw value in buying now as they may have less competition than after the concession came in.
However Independent Property Group's David Shearer said anyone buying under $470,000 would be $7000 better off under the current scheme, as they would pay no stamp duty and get the grant.
He also said after July 1, first home buyers under the $160,000 threshold would need to buy a property worth more than $526,000 to be square with the current scheme - and the more over, the bigger the benefit.
"For example, a brand two-bedroom terrace home at Haus Lane in Dickson at $625,000 currently pays $17,800 in stamp duty, so even considering the loss of the $7000 grant, a first home buyer after July 1 buying at $625,000 is $10,000 better off," Mr Shearer said.
But Real Estate Institute of the ACT president Michael Kumm said buyers would have more choice if they held off, because of the current restrictions on value and type of property.
"My feeling would be to hold off. There's not that many homes in the lower price bracket," Mr Kumm said.
But it isn't just first home buyers who will save on stamp duty.
Stamp duty will also be cut for residential buyers who don't meet the threshold the day after the 2019 budget is handed down, in line with the cuts set out in last year's budget papers.
For all buyers, it will mean a $1300 reduction on stamp duty for Canberra's median house price of $750,000, to $22,200. People buying units at the median unit price of $430,000 will pay $9020 in stamp duty, a saving of $560 on the current stamp duty bill.
Stamp duty on a $500,000 property will fall to $11,400 (a reduction of $700). Buyers of a $1 million property will pay $36,950 (a saving of $1800) and buyers of $2 million properties will pay $90,800 (a $3800 saving).
Stamp duty is lower in the ACT than in NSW, where it is $29,240 on a $750,000 house, and Victoria, where the tax is $40,070.
However, home owners will face another rise in rates as part of the tax reform.
Rates rose an average 7 per cent last year on houses and 19 per cent on units, but that could change this year following a lengthy parliamentary inquiry.
Mr Shearer said the number of new investors in Canberra was diminishing because of the "significant cost burden to investor owners".
"That is the first problem, the second is that the ACT is by far the most expensive jurisdiction in Australia to own a rental property in, so new investors in Canberra are a diminishing proportion of buyers. We are simply not placing enough rental property on the market each year to meet rental demand," Mr Shearer said.
"It's a bit horrifying that rentals in the ACT have gone up so much in the past three years, yet the ACT government refuses to acknowledge this increase is of their making.
"A good start would be to abolish land tax, as it is very simply, a tax on renting."
Housing Industry Association ACT executive director Greg Weller said the issue of stamp duty "paled in significance" to the fact homes were not affordable for first home buyers.
"That comes down to the cost of land in the ACT. The government is trying to address the problem of affordable housing in the ACT whether through a grant or through a stamp duty concession as one of the major land developers in town," Mr Weller said.
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