Minister Barr: ACT Budget 2015 announcement: Cuts to stamp duty and insurance tax
- Written by ACT Government
Released 01/06/2015
The ACT Government is continuing to deliver on its commitment to cut taxes, becoming the first Australian State or Territory to abolish tax on insurance policies.
Next week’s budget will also continue the abolition of stamp duty, with Canberrans saving thousands on unfair stamp duty taxes when purchasing a household in the ACT. The Government has cut stamp duty in every budget since 2012, and remains committed to further cutting the tax over the coming years.
Through these reforms, we are leading the way on creating a tax system that is fairer, simpler and more efficient and that is building greater fiscal and economic sustainability for the ACT.
Stamp duty cuts
Since the start of the Government’s nation-leading tax reform program in 2012-13, conveyance (stamp) duty payable has been cut every year for all property values.
The 2015-16 ACT Budget will reduce these rates even further, and from 3 June 2015:
- The buyer of a $300,000 home will save about $2,900 in stamp duty compared to before the introduction of tax reform (a saving of $900 more in 2015-16 compared to the previous year);
- the buyer of a $500,000 home will save $5,900 ($1,200 more in 2015-16); and
- the buyer of a $750,000 home will save $7,775 ($1,200 more in 2015-16).
Stamp duty reductions are also benefiting businesses, with the 2015-16 Budget delivering further reductions in stamp duty for commercial properties. For example the stamp duty on purchase of a $5 million commercial property in 2015-16 will be $60,750 lower than pre tax reform levels.
In addition, eligible pensioners, persons aged over 60, and first home buyers are eligible for the concessional rate of stamp duty – meaning they pay only $20 in stamp duty. This will save buyers more than $15,000.
Insurance policies cut
From 1 July 2015 insurance tax will again be cut. The tax will be cut from 4% to 2% on all premiums, including building and contents, motor vehicles, professional indemnity (excluding life insurance). Tax on life insurance will be cut from 2% to 1%. 2015-16 will be the last year that duty will apply on insurance policies, with the tax being fully abolished effective 1 July 2016.
Once insurance tax is abolished, households and businesses will save 10% on their building, contents, motor vehicle, business and professional insurance. Savings for a household with $3,000 of building, contents and motor vehicle insurance are $300 annually. Savings for a business with $10,000 of building, contents, motor vehicle and business insurance are $1,000 annually.
The ACT’s low and declining insurance duty rates also compares favourably to other jurisdictions. The rate of duty on general insurance in New South Wales and Queensland is 9 per cent, 10 per cent in Victoria and 11 per cent in South Australia.
The upcoming budget will be for Canberra – renewing our suburbs and delivering the services our community needs. By progressively abolishing stamp duty on home sales, we are not only making it more affordable for Canberrans to buy a home, but also creating a tax system that will provide a more stable revenue base for the ACT Budget to fund essential services, such as schools, hospitals, roads and public transport.
- Statement ends -
Section: Andrew Barr, MLA | Media Releases
