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The ACT is trying to incentivise increased density by cutting down on the costs for people prepared to subdivide.
The territory government has announced it will introduce a new stamp duty exemption for dual occupancies on suburban residential blocks.
The introduction of the exemption will coincide with the commencement of the new Territory Plan, which allows dual occupancy developments on large blocks. Any block over 800 square metres in residential zone 1 (RZ1) will be allowed to accommodate a modest second dwelling of up to 120 square metres in size. Owners will then be able to unit title that second dwelling and sell it off individually.
The stamp duty exemption will apply to the first transfer of unit-titled dwellings on suburban residential blocks for purchases valued up to $800,000 from 27 November 2023 until 30 June 2026.
In addition, the government has also announced its intention to change how the charges for lease variations on existing blocks are calculated – a cost that currently serves as another common deterrent for development.
A windfall gains tax, the lease variation charge (LVC) is applied when a lease holder receives permission from the government to vary their lease to enable new or additional development.
From the time the Territory Plan comes into effect until 30 June 2026, lessees will have the choice on how the LVC is calculated for maximum number of dwelling lease clauses on RZ1 blocks, between the codified values or 75 per cent of the value uplift as measured by an accredited valuer.
According to ACT Chief Minister Andrew Barr, the change is intended to “put the choice in the hands of the lessees as to whether they prefer the certainty of the codified values or the flexibility to seek a bespoke valuation to test the value uplift”.
This also enables the government to monitor developments and sales of dual occupancies to ensure codified values are then set at the right level going forward.
Mr Barr said these changes are not only intended to encourage development, but also introduce greater diversity to the housing options in Canberra’s suburban neighbourhoods.
“Both the stamp duty exemption and LVC changes will support the development of more dual-occupancy homes in our suburbs, providing more opportunities for Canberrans to find a home, including existing families looking to downsize in the suburbs they’ve called home for many years,” Mr Barr stated.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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