The unemployment rate was 3.8 per cent in May 2024, with wages expected to grow by 4 per cent in 2023-24 and 3.5 per cent in 2024-25. Economic growth is expected to increase as inflation stabilises, with the population forecasted to grow at 2 per cent in 2023-24, stabilising to 1.75 per cent in 2024-25. This is due to natural population increase as well as net overseas and domestic migration.
Like other budget announcements, the Territory has focused on relieving cost-of-living pressures for its people through temporary relief on schooling costs, electricity, gas, water rebates and other targeted rebates.
Key highlights
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$8b towards an Infrastructure Investment Program over five years.
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$2.6b for the public health care system.
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$295m for housing including supporting private renters and helping more people buy their own home.
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$229m towards environment, sustainable development and climate change.
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$100m for education and skills over four years, including $37m in public and early education.
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An additional $1m to expand the Future of Education Equity Fund supporting with the cost of education.
Revenue Measures
The Budget has announced the following revenue measures.
Land Tax
The Government has announced that a new land tax threshold will be introduced at $1m average unimproved value (AUV), with existing marginal tax rates adjusted accordingly. This should provide some relief for landowners as the current threshold applies to properties with an AUV from $275,001 to $2m. Details of the revised rates are yet to be provided.
Short-Term Rental Accommodation Levy
Similar to Victoria’s proposed ‘Airbnb’ levy, the Budget signals the introduction of a new Short-Term Rental Accommodation levy from 1 July 2025, which will be applied at a rate of 5 per cent of a short-term rental property’s gross revenue. Revenue from the levy is estimated to be $12m over the three years from 2025-26 to 2027-28.
Payroll Tax Surcharge
The Government will bring forward the introduction of a payroll tax surcharge announced in last year’s Budget for large national and multi-national businesses operating in the Australian Capital Territory by one year, to 2024-25, and increase the surcharge in 2025-26. This will result in:
- A 0.25 per cent surcharge for businesses with Australia-wide wages above $50m and a 0.5 per cent surcharge for businesses with Australia-wide wages above $100m, in 2024-25; and
- A 0.5 per cent surcharge for businesses with Australia-wide wages above $50m and a 1 per cent surcharge for businesses with Australia-wide wages above $100m, from 2025-26 onwards.
The payroll tax threshold will remain at $2m, which is the highest of all Australian jurisdictions. Universities that have a campus in the Australian Capital Territory will not be subject to the additional payroll tax surcharge.
Home Buyer Concession Scheme
In an effort to improve access to the housing market for first home buyers, the Australian Capital Territory Government announced an increase in the property value threshold for the first homeowner transfer duty concession. From 1 July 2024, eligible first home buyers will be entitled to a full stamp duty concession on the first $1m of property value.
In addition, the income eligibility threshold for the first homeowner concession will increase to $250,000 for home buyers who have not owned a property in the previous five years. Previously, the income eligibility threshold was set at $170,000 a year for home buyers who had not owned a property in the previous two years.
Stamp Duty Concession
The Budget also temporarily expands the stamp duty concession for off-the-plan unit-titled apartments and townhouses to apply to properties valued at up to $1m in 2024-25. The concession was previously limited to properties valued at up to $800,000.
Similarly, in an effort to support the development of higher-density housing, the RZ1 Unit Duty Exemption Scheme has been temporarily expanded in 2024-25 to include properties valued up to $1m. This scheme was originally announced in October 2023, and applied to the first transfer of unit-titled dwellings on suburban (RZ1) blocks valued up to $800,000.
Other measures
Other measures include:
- An extension of the Disability Duty Concession Scheme and Pensioner Duty Concession Scheme, to provide a full stamp duty concession on the first $1m of property value, with a partial concession for the value in excess of $1m; and
- The introduction of a new Severe Disability Duty Exemption from 1 July 2025, which will mean people with a severe disability and their carers will not have to pay stamp duty if the home they are buying is their principal place of residence.
If you wish to discuss the Australian Capital Territory Budget announcements, please reach out to a Grant Thornton Partner today.
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