Low-income homeowners have been the biggest losers from the government's tax reform agenda, while first home buyers are among the most likely to benefit, new analysis suggests.
The government-commissioned report from the ANU and University of Canberra, published on Thursday, shows most middle-income families across the territory have been made better off under the changes. Meanwhile a separate ACT Treasury analysis shows the reforms - which have hiked up rates while reducing stamp duty - have not given it any extra tax revenue.
The universities' analysis showed that between 2012 and 2018, high-income households were paying a greater proportion of rates and stamp duty under the new system, while middle-income households were paying less. However, low-income homeowners were among the biggest losers, as they were the least likely to buy a new property.
"This means they wouldn't benefit from the lower stamp duty as they aren't purchasing another property; but as home owners, would be paying higher rates," the report said.
"Low-income renters were in a different situation, as if they can afford to purchase a property (which some of them will), the model assumes they will. This means they will benefit from the lower stamp duty."
All wealth levels, except for the very lowest, were purchasing more properties under the tax reforms, the analysis suggested. It found property prices had likely gone up because of the reduction in stamp duty, perhaps because buyers were using the saved stamp duty money towards their deposit.
"They are then able to buy a more expensive house given the same credit constraints," the report read.
With the heaviest reform work now in the past, general rate increases will be lower in the future.Chief Minister Andrew Barr
A separate ACT Treasury analysis found the tax reform program had been broadly revenue neutral over the first seven years - from 2012-2018. It said the government had collected $62 million less revenue than would have been collected without the reform.
"The increase in cumulative general rates of $793 million is more than offset by the cumulative revenue forgone from stamp duty and insurance duty of $855 million," it read.
Chief Minister Andrew Barr said the analysis showed the stamp duty reductions were helping first home buyers and lower-income households to access the housing market.
"Despite anecdotal commentary to the contrary, there was no definitive evidence that tax reform had led to higher rental prices in the ACT. In fact, that analysis found that there were more properties available to rent due to tax reform," he said.
"As has been previously indicated, with the heaviest reform work now in the past, general rate increases will be lower in the future.
"With the COVID-19 emergency rates rebate of $150, average general household rates in Canberra will not increase in this this current financial year, and 110,000 Canberra households will see a rates reduction this financial year."
Mr Barr said the next stage of tax reform would begin in 2021-22, with rates increases to be lower than in the first phases of reform, at an average of 3.75 per cent.
Opposition Leader Alistair Coe criticised the government for waiting until the last sitting day of the parliamentary term to release the findings.
"There is no opportunity for parliamentary scrutiny," he said. "Once again they're trying to ram this through before the election. What we do know is there are tens of thousands of Canberrans that are doing it tough as a result of this government's unfair rates regime."
The territory's contentious tax reform regime began in 2012 as part of a 20-year plan to gradually phase out taxes like stamp duty in favour of hiking up residential rates. The government argues it is revenue neutral, a more efficient way of collecting tax and hard for large companies to avoid.