ACT budget 2019: How rates will increase for every suburb in Canberra

Rates for houses will rise on average by 7 per cent while unit rates will increase 11 per cent, the 2019 budget handed down on Tuesday shows.

However separate rating factors will be introduced for units and houses, after a Legislative Assembly inquiry recommended major changes to the land tax system.

The method of calculating unit rates changed in 2017 from being based on a share of the unimproved value of land to calculating the value of the entire block, then dividing that by the number of units.

This pushed most units into the highest tax bracket, leading some owners to experience rates rises of up to 117 per cent.

Mr Barr said the changes would ensure there weren't "any inadvertent anomalies as a result of the tax reform process".

"I guess that's what you'd expect a government to do - to listen and respond," Mr Barr said.

Mr Barr also said he was acutely aware some households were feeling the pinch as the tax reform program approached the halfway mark.

"[This] is why I want to reassure Canberrans that the heaviest lifting of this reform has been achieved," Mr Barr said.

"Over these forward estimates, the rate of growth in rates will slow as we move towards the next five-year phase of the tax reform program."

However rates will continue to rise for the next two financial years.

The charge is expected to raise $306 million from householders and rural landholders (an increase of 7 per cent), $82 million from unit owners (an 11 per cent rise) and $211 million from commercial rates (up 6 per cent).

Thirty-two per cent of house owners will see a rates rise this year of between $100-150, while 30 per cent will experience an increase of between $150-200.

Thirty per cent of unit owners will see their rates bill go up by $50-100, 28 per cent by $100-150 and 19 per cent by $150-200.

Inner south Canberra residents will see the largest increases to their bills this year, with unit rates to rise $236 to $1927 and houses up $442 to $5551.

In Belconnen, house owners will see their rates rise on average by $164 to $2321 while units rates increase $137 to $1531.

Rates in Gungahlin will rise $172 to $2097 for houses and $113 to $1383 for units.

In the inner north, average rates will rise $166 to $1589 for units and $321 to $3929 for houses.

Tuggeranong unit rates will increase by $136 to $1568 while rates for houses will increase by $118 to $2151.

In Weston Creek, rates for houses are up $156 to $2536, while rates for units will increase by $150 to $1718.

Rates in Woden will rise by $224 to $3354 for houses and by $174 to $1769 for units.

In Molonglo, rates for houses will increase by $151 to $2589 for houses and $129 to $1289 for units.

The most expensive suburb for house rates is Forrest, with owners to be billed a whopping $10,171, although a unit would only be $2546.

Yarralumla was the highest suburb for unit rates at $3461 - about the same as a house in Curtin - while a Yarralumla house would have a $6216 rates bill.

But as rates rise, stamp duty will fall.

First homebuyers with a household income of $160,000 will pay no stamp duty from July 1, while the rest will save $1108 on the median $670,000 house due to the tax reform.

The residential stamp duty take is expected to rise by only 1 per cent to $191 million in 2019-20, while commercial stamp duty will increase 14 per cent to $73 million. However stamp duty as a share of total revenue will fall from 13 to 11 per cent, a downward trend Mr Barr said would continue in the forward estimates.

For Samara Kelly and her fiance Elliot Thorn, changes to how the ACT government supports first-home buyers have come at the most opportune time.

Ms Kelly and Mr Thorn, who rent in Flynn, are saving up to buy their first home and expect they will be ready to break into the market in the next three to four months.

The couple have three pets, who will need room to roam. Mr Thorn has a passion for woodworking, so a spacious garage is a must.

Their combined needs mean they have ruled out buying an apartment, and will most likely be looking for a larger townhouse or detached home.

That would have excluded them from receiving support under the ACT government's existing first-home buyer support scheme, which offered $7000 grants to people buying into only newly-built or substantially renovated homes.

"We would have bought a new property regardless [of the changes], but this just gives us that boost that will help us," Ms Kelly said.

MORE BUDGET NEWS

The budget also foreshadowed changes to the way commercial rates are calculated, following a separate Assembly inquiry into the charge.

The rates are currently calculated on a three-year rolling average of the unimproved land value.

However this has led to huge rates increases in areas with lots of recent sales.

The government will move to lengthen the amount of time the land value is calculated over from 2020-21.

The exact period of time will be subject to consultation with the industry.

The ACT Revenue Office will also put more resources towards recovering unpaid tax from landlords.

It will target people who have sold property in the last few years to see if their declarations to the Australian Tax Office match their declarations to the ACT Revenue Office.

However the penalty for failure to pay land tax has been slashed from 50 per cent to 25 per cent, to bring the ACT in line with other jurisdictions.

Changes are also in the offing for the lease variation charge. The government will explore expanding the list of standard charges, so the development doesn't have to undergo a land valuation.

- with Dan Jervis Bardy. Maps and graphs by Markus Mannheim