The ACT government will reap an extra $46.4 million from ratepayers in 2013-14, increasing general rates by about 10 per cent annually.
Home owners will be slugged an extra $139 a year on average as a result of the changes. Commercial rates will also increase, by about 20 per cent, or more than $3380.
The changes are in line with the government's tax reform policy announced last year, which involves abolishing stamp duty over 20 years and replacing the lost revenue with increased rates. Stamp duty on housing sales will continue to drop, so from Wednesday there will be 2.2 per cent stamp duty on the first $200,000 of a property, dropping to 2 per cent next year.
The rate of stamp duty is paid on a sliding scale, with the portion between $1 million and $1,649,999 of the total value of a property incurring the most tax, 7 per cent.
The buyer of a $500,000 home from Tuesday will pay about $3400 less in stamp duty compared to when the tax reform started.
Stamp duty was substantially reduced for large commercial property buyers. From Tuesday, properties worth $1.65 million and more will incur a flat rate of stamp duty of just 5.5 per cent, down from 7.25 per cent, a move ACT treasurer Andrew Barr said was aimed at enticing businesses to Canberra.
According to the government, a $25 million office block will have its duty reduced by $413,050 under this budget compared with the year 2012-13.
For business owners, payroll tax remains unchanged at 6.85 per cent of Australia-wide wages, with a threshold of $1.75 million on wages paid per year.
Joshua and Katie Ceramidas, both public servants, bought their apartment in New Acton South off the plan three years ago. Mr Ceramidas is also active within the ALP, and edits a journal for the party.
Mr Ceramidas said the couple's first home buyers grant was consumed by stamp duty, so while he and his wife would look again at their household budget to account for increases to rates, the changes to the tax structure would assist others looking to buy.
''No one wants their household expenses to go up, I think we've got to accept that any rates rise is going to cost people something on a day to day basis, but because it's tied to a reduction in stamp duty it will help people actually access home ownership earlier in their lives,'' he said. ''In a circumspect way, I accept it's something that has to happen.''
Mr Ceramidas, who is also president of the Canberra City Residents Association, said a reduction of stamp duty at the top end of the market may help attract businesses into the city, making Canberra more vibrant.
''We might want to go on and move to the suburbs into the future when we have a larger family and if our home's value is diminished because the market isn't strong that would certainly be a problem for us,'' he said.
But Ratepayers' Association of the ACT president Peter Jansen slammed the rates rises, calling for full projections on rates for the entire phasing-in period of the new tax system.
Clarification: It has subsequently been brought to our attention that Mr Ceramidas is active within the ALP and edits a party journal. This was not disclosed to canberratimes.com.au when the article was published.