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Impacts on the property industry of the ACT budget

posted 23rd June 2017
3 major changes signaled in the ACT Government’s budget delivered on 6 June 2017 will impact on the property industry.

Land tax to be levied on vacant residential properties
In the ACT, land tax is already paid by owners of residential properties that are rented, or that are owned by a company or a trust. Land tax is not paid by the owners of commercial property.

From 1 July 2018, land tax will be extended to all residential dwellings that are not the owner’s principal place of residence, whether they are rented or not. The new tax is expected to raise an additional $2 million in revenue annually.

The basis for calculating land tax, and the marginal rates, will also change on 1 July 2017.

Stamp duty on the transfer of commercial properties
From 1 July 2018, stamp duty on the transfer of a commercial property valued at less than $1.5 million will be abolished. Stamp duty will be paid at a rate of 5% where a property’s value is equal to or greater than $1.5 million. This will mean that the majority of commercial conveyance transactions in the ACT will not be subject to stamp duty from 1 July 2018.

From 7 June 2017 different stamp duty rates will apply to commercial and residential properties. The commercial stamp duty rate will be effectively half of the residential stamp duty rate.

Lease variation charges
From 1 July 2017, the Government has changed the Lease Variation Charge (LVC) applicable to varying crown leases to limit the maximum number of residential dwellings permitted on the land. This applies where a crown lease doesn’t currently specify the maximum number of dwellings.

Currently, a variation of this type of crown lease would incur an LVC of $7,500 per dwelling for the first 3 dwellings, and $5,000 for each additional dwelling.

We understand that from 1 July 2017, the new LVC will be calculated on the basis of a flat charge of $30,000 per dwelling.

However, development applications which are formally submitted for a completeness check in eDevelopment prior to 30 June 2017 will incur the current (lower) LVC.

What should you do?
If you are unsure of how the budget changes will affect you or your clients, or you wish to discuss the implications further with an experienced property lawyer, please call us.

For more information contact the Property Commercial & Finance Team:
Christine Murray Managing Partner Property Commercial & Finance Team
(02) 6279 4402 Christine.Murray@MVLawyers.com.au

 



This material has been prepared for the general information of clients of Meyer Vandenberg Lawyers. Its is not intended to take the place of professional advice and readers should not take action on specific issues in reliance upon any matter of information contained in it.

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