'Forever gone': stamp duty axed in home-boosting budget

Currently, only homes under $1 million are exempt and purchasers must be below income eligibility thresholds.

"It's the result of a long-term plan to remove what is an inefficient and unfair tax, whilst, of course, continuing a progressive removal of stamp duty across the entire system," Chief Minister Andrew Barr told ABC Radio.

Stamp duty will also be dumped for pensioners, some National Disability Insurance Scheme recipients, anyone who has not owned a property for five years and owner-occupiers purchasing new builds.

Eliminating stamp duty in its entirety for key groups was a major milestone in the territory's 20-year tax reform journey, Mr Barr said.

"Forever gone, never again to emerge," he said.

The changes were a significant step forward in addressing long-standing barriers for first home buyers and new supply, Property Council ACT executive director Ashlee Berry said.

It complements a suite of policies aimed at boosting housing supply and home ownership.

A temporary reduction in the ACT lease variation charge, which levies developers for the increase in value resulting from a building approval, will lower development costs and encourage builders to bring forward more projects, ACT Treasurer Chris Steel said.

Recent "missing middle" reforms allowed more low-rise housing, such as terraces and townhouses, across large swathes of Canberra in a bid to boost supply by 30,000 new homes by the end of 2030.

The ACT will also follow NSW in introducing a pattern book of pre-approved plans, which will enable builders to access faster approvals if they use the designs.

The cost to the budget of the stamp duty removal would be $17 million in foregone revenue in year one, before growing a little each year after, Mr Barr said.

In his mid-year budget update in February, the ACT deficit was forecast to shrink from $499 million in the current financial year to $80 million in 2026/27.

But the territory's net debt was projected to grow from $11 billion to $12.8 billion.

In a report for the ACT Legislative Assembly in March, independent economist Saul Eslake found the territory's financial position had deteriorated significantly in the past decade.

While the ACT was around the middle of the pack compared to other states and territories on several metrics, its net debt as a proportion of gross state product was significantly higher than the average and projected to widen in 2026/27.

The government has also confirmed an annual levy of between $100 and $250 for property owners, introduced in the 2025 budget to fund a blowout in health costs, will be discontinued.

But much of the territory's infrastructure pipeline has been put on ice in the search for savings.

Mr Barr also said projects such as the Kingston Arts Precinct had to be delayed because of a shortage of workers.

The new Northside Hospital will set the budget back $1.3 billion over seven years and has been identified by the government as its largest infrastructure priority for the rest of the decade.

It leaves other projects like the light rail extension to Woden, in Canberra's south, up in the air.

While the budget does include $15 million for some lighting and lift upgrades at GIO Stadium, footy fans could be waiting a while yet for their long-promised new arena.