The ACT government reveals in Tuesday's budget it will continue to drive rates and land tax higher, while also announcing that people who leave their homes vacant for an extended period will have to pay land tax.
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Land tax averages $3715 for houses and $2227 for units in 2017-18. The new charge for an estimated 1500 to 2200 vacant homes was one of the few surprises in Chief Minister Andrew Barr's sixth budget.
The government will also reduce the discount for people who pay their rates upfront. Already down from 3 per cent a year ago, the discount for early payment is cut to just 1 per cent.
House owners will face an average increase in their rates bill of $159, or seven per cent, to $2295. Owners of units, including apartments and dual occupancies, will pay an average $217 more, or 19 per cent, to $1352. About one-third of Canberra's 150,000 homes are units.
Because rates are based on land values, the biggest increases will hit the inner north and inner south. House owners in Dickson, Campbell and Turner will pay an average 13 per cent more. And unit owners in Campbell, Hackett, Barton, Kingston, Yarralumla and some other suburbs including Hawker and Isaacs will pay 25 to 30 per cent more.
On top of the rates increases, the owners of investment properties will pay an average of $433 more a year in land tax – most of the impost hitting unit owners, who face an average $642 increase a year through a new way of calculating land tax.
Stamp duty for buyers of new properties will be cut, as previously foreshadowed. For a house worth $700,000 stamp duty will be cut by $1100, to $22,360. Overall, residential stamp duty will raise $194 million in 2017-18, down from $200 million in 2016-17. For commercial properties worth less than $1.5 million, stamp duty is halved this year and abolished in the next budget.
Chief Minister Andrew Barr delivered good news on the budget deficit, which is forecast for this year, 2016-17, at $74 million, an improvement of more than $100 million on the budgeted figure.
The 2017-18 budget deficit has worsened and is now forecast at $83 million. But Mr Barr is still anticipating a surplus in 2018-19, albeit only $10 million in the positive in a budget of more than $5.5 billion.
Mr Barr said the budget was driven by two imperatives: delivering election promises and repairing the bottom line.
It aimed to "keep the lowest possible range of increases across all taxes and charges, but we do need to provide services across a growing city."
The budget includes extra money for a range of projects, including for the Bimberi youth justice centre, an expansion of the Dhulwa mental health unit, the community organisation Shout, gender diversity, children's health checks, bulk billing and vaccinations.
The University of Canberra public hospital prepares for opening with $15 million of staff training. And work is set to begin on the new "SPIRE" building at the Canberra Hospital in 2019-20, with $200 million in the 2020-21 budget for construction.
An increase in the building levy will raise $2.2 million to spend on better policing of new buildings, after a string of problems with defective apartments.
A big tax break has been delivered to small and medium clubs.
The budget includes measures to drive efficiency, including $3.1 million in 2018-19 to deal with "excess staff" whose jobs no longer exist. Property will also be consolidated into one property management division, with resulting property sales worth $22 million over four years.
The government will spend $1 million a year on new staff to provide better oversight of the new land agencies which replace the troubled Land Development Agency on July 1. The funding would "ensure rigour and accountability in the decision-making processes", the budget says.
Mr Barr said $59 million would be spent by the new City Renewal Authority over four years, including $38 million on the West Basin reclamation and boardwalk, $20 million for planning and developing City Hill and West Basin, and $1 million for events.
The government would create the city centre that Canberra deserved and "no more will we have the joke that Canberra is 100 suburbs in search of a city", he said.
The city dominates land release, with 51,000 square metres of mixed-use space including apartments to be released in the city, among 77,000 square metres Canberra-wide in 2017-18. In specific residential release, 1500 of the 4100 blocks to be released in the 2017-18 year are in the city, and 1000 in Belconnen where the new area of Ginninderry is being opened up.
Mr Barr welcomed strong economic growth, with gross state product growing at 3.25 per cent in 2016-17, similar to the previous year. With the end of the resources boom, the southeastern states were driving the nation's economic performance, he said.
