Stamp Duty and Land Tax in ACT What Property Buyers and Investors Need to Know

ACT Stamp Duty, Land Tax and Leasehold: What Buyers and Investors Should Know

Buying or owning property in the Australian Capital Territory involves more than the contract price. Duty and tax considerations significantly affect property purchases, investments and long-term holding costs.

This article outlines key features of transfer duty and land tax in the ACT and explains what buyers, investors and businesses should keep in mind.

Transfer Duty in the ACT

In the ACT, transfer duty is governed by the Duties Act 1999 (ACT). Duty applies to a wide range of “dutiable transactions”, including transfers of Crown leasehold interests (as all ACT land is leasehold).

Duty is calculated on the dutiable value — the higher of consideration paid or market value.

The ACT Government has been gradually phasing down transfer duty as part of its long-term tax reform program. However, duty still applies to many residential and commercial transactions unless a specific concession or exemption applies.

Duty may also arise from:

• granting or transferring a Crown lease
• certain trust declarations
• acquisitions in “landholder” entities under Chapter 3A

Foreign purchasers are subject to Foreign Ownership Surcharge Duty of 8% on residential land.

Land Tax in the ACT

Land tax is governed by the Land Tax Act 2004 (ACT) and applies to rental properties, not owner-occupied properties. Land tax applies whether the property is residential or commercial.

Key features include:

• Only investment properties incur land tax
• Rates are based on AUV (average unimproved value)
• Owners must notify the ACT Revenue Office when a property becomes rented

Unlike NSW and QLD, your own home is never subject to land tax in the ACT, even if it is high value.

Foreign owners may also incur foreign owner land tax surcharges.

Exemptions apply in limited circumstances, including land used by charities.

Practical Implications for Buyers and Investors

ACT buyers and investors should be aware of:

• leasehold complexities unique to ACT land
• duty concessions (particularly for first-home buyers through the Home Buyer Concession Scheme)
• land tax liabilities arising immediately once a property is rented
• increased holding costs for foreign investors

Businesses acquiring premises must factor in both duty and land tax consequences when deciding whether to buy or lease.

Conclusion

Duty and land tax remain significant components of property ownership in the ACT. Proper planning and early advice help buyers and investors understand these obligations and structure their affairs efficiently. Contact a Canberra conveyancer today and receive tailored advice.

This article was prepared with the assistance of Alexander Koshy.