Canberra first home buyers will no longer have to pay stamp duty, under housing and tax reforms that come into effect today. 

The stamp duty exemption has also been extended to pensioners and eligible National Disability Insurance Scheme participants.

Pensioners downsizing to smaller homes will receive a full stamp duty remission, while stamp duty has also been abolished for owner-occupiers buying new unit-titled properties, including turn-key and off-the-plan units.

Chief Minister Andrew Barr MLA said the ACT was the first jurisdiction in Australia to permanently abolish stamp duty for first home buyers, with no price thresholds or income tests.

“It’s a milestone reform that removes one of the biggest barriers to home ownership,” Mr Barr said.

Master Builders ACT welcomed the stamp duty changes, saying they would make housing more affordable and encourage activity across the property market.

“Stamp duty is a deeply inefficient tax,” CEO Anna Neelagama said. “Australians were promised its gradual abolition with the introduction of the GST, and we congratulate the ACT Government for continuing to deliver on that long-term tax reform agenda.

“Making permanent stamp duty concessions for first home buyers, eligible downsizers and unit title properties will improve housing affordability, encourage mobility and stimulate activity across the ACT property market at a time it is most needed.”

ACT Shelter, however, was concerned that not all elements of the stamp duty package were progressive.

The Government’s Missing Middle Housing Reforms also began today, allowing townhouses, terraces, low-rise apartments, and a wider range of multi-occupancy housing to be built on RZ1 blocks.

The government has also published a guide of high-quality pre-approved missing middle home designs that can be built without a development application.

To encourage builders to take up the reforms, the codified Lease Variation Charge (LVC) will be halved for eligible missing middle housing developments in RZ1 and RZ2 areas, lowering the cost of building additional dwellings. 

The government said the reforms would increase the supply and diversity of housing in established suburbs, easing pressure on the rental market.

Planning minister Chris Steel MLA said the reforms would support “gentle urbanism” by allowing new homes in existing suburbs, while preserving neighbourhood character.

“For renters, families, and older people who want to age in place, this will mean more housing choice where they want to live,” Mr Steel said. 

“The Government expects a gradual take-up of the zoning reforms over several decades with new homes built in suburbs right across the city.”

Ms Neelagama welcomed the missing middle reforms, saying they were fundamental to achieving the ACT’s target of 30,000 new homes by 2030, but she said further changes would be needed to ensure the reforms led to more homes being built.

“To unlock the full benefits of these reforms, planning approvals, utility connections, traffic management and other regulatory processes must also become simpler, faster and more coordinated,” Ms Neelagama said.

“Reducing unnecessary red tape will be critical to ensuring these reforms translate into more homes on the ground in a cost and time efficient way.”

ACT Shelter did not support the the remission of the LVC for market housing.

“ACT Shelter welcomes reforms that will help shift the ACT towards a fairer housing and tax system, including the move away from stamp duty and the expansion of more diverse housing in established suburbs,” CEO Corinne Dobson said.

“Ultimately, the most effective way to deliver housing that is genuinely affordable for people on lower incomes is sustained investment in social and affordable housing, alongside sensible planning and tax reform.”

Other cost-of-living measures beginning today include an increase in the Sustainable Household Scheme loan cap to $20,000; a reduced monthly public transport fare cap for tertiary students; and another month of ACT-funded fuel excise cuts.