In exciting and expected to be stimulatory news for Canberra home owners, the ACT government has announced plans to phase out stamp duty over the next 20 years, starting immediately with a reduction of $2,450 on a house purchase of $500,000.
Until today a house purchase of $500,000 would attract stamp duty of $20,500. That amount will now be $18,050.
Reducing the upfront costs for a home is seen as a key step in improving affordability, and will be welcomed by Canberra’s first home buyers who are confronted with the highest median price in the country.
Treasurer Andrew Barr announced the cuts today as part of his budget speech, with the $2,450 concession increasing to $7,000 after 5 years.
Coupled with the RBA’s move today to reduce rates by a further 25bps, which is seen as an insurance policy against further uncertainty in global markets after many felt they failed to cut early enough during the GFC, means that homebuyer’s are faced with the best buying conditions for many years.
What’s all this mean for Canberra house prices?
In short it can only help place a temporary floor under falling house prices in the Canberra Real Estate market. According to Ray White Belconnen Principal, Ben Faulks, transaction costs (stamp duty, agent fees, conveyancing, etc.) are a key reason why some people are opting to stay put and aren’t moving up the property ladder, and a reduction in these fees can only help.
Similarly with many properties having had their price reduced over the last few months, buyers have been suffering from the fear that they could purchase the property they like for less next week and as a result have been delaying their purchasing decision. The reduction in both interest rates and stamp duty should see an increase in competition at open homes which should put a stop to this, at least in the short term, and give the market the boost it needs.
For those currently on the market it means that the coming weeks presents a good opportunity to lock in a buyer off the back of this enthusiasm.