We have already looked at the changes to apartment rates, but why are these happening? It’s important for Canberra property owners to understand.
As you will have read in our other piece, rates for apartment owners in Canberra have gone up significantly. Some suburbs will see unit owners pay only 10 or 12 per cent more in council rates, while others will be hit by a hike of more than 30 per cent.
It’s important to understand why this is happening – it’s not just the government slugging title holders for more money.
As the ABC reported, this is a measure to balance out the significant losses the government will take through another large tax change – the abolition of stamp duty. Long called an extremely inefficient tax by bodies like the Housing Industry Association, stamp duty is often a big barrier for new home buyers seeking Canberra property.
Because the tax is levied as a percentage of a property’s value, growth in stamp duty has skyrocketed with our high-performing housing markets. CoreLogic RP Data estimated in December 2016 that Canberra buyers would pay more than $17,000 in stamp duty.
By removing this, the territory government hopes to break down barriers for first home buyers. Unfortunately, it appears the counteraction is higher rates for those who have already bought a home.