People buying property off the plan won't have to pay stamp duty tax until they take possession, rather than having to pay upfront and sometimes up to a year before moving in, under changes introduced by the ACT government on Thursday.
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Chief Minister Andrew Barr said the change would mean "a significant cash flow advantage for purchasers, especially those buying off the plan".
Mr Barr describes the new system for collecting stamp duty as "barrier free". Instead of paying stamp duty when contracts are exchanged, it will be paid when title is transferred – and any discounts will have to be claimed at the same time. Instead of paying stamp duty tax to the Revenue Office, then lodging transfer documents with Access Canberra later, there will be just one contact with Access Canberra.
The government has also abolished a range of token stamp duty payments of $20 for property transfers when full stamp duty doesn't apply, including for new crown leases, unions, deceased estates, transfers between spouses, and the like.
The bill will not take effect until it is debated and passed, and until the government's new IT system is ready to handle the change. Mr Barr expects the IT changes to be ready in early to mid 2017, but the changes apply from January 2018 at the latest.
In the meantime, the bill gives Mr Barr's cabinet powers to change the rules during the transition period by regulation, without having to introduce new legislation.
It says, "A regulation may modify this chapter [the transition chapter in the bill] (including in its operation in relation to another territory law) to make provision in relation to anything that, in the executive's opinion, is not, or is not adequately or appropriately, dealt with by this chapter."
The explanatory statement says any regulation brought in by cabinet must not widen the act's purpose.
Giving cabinet the power to make changes by regulation was "an important mechanism for achieving the proper objectives, managing the effective operation, and eliminating transitional flaws in the application of the act in unforeseen circumstances by allowing for flexible and responsive (but limited) modification by regulation", the explanatory statement says.
The government is abolishing stamp duty over two decades or more, in a process begun in 2012.
