ACT stamp duty gives budget higher-than-expected boost

Figures from ACT Treasury show overall tax revenue is almost $32 million higher than expected so far this financial year.

Revenue from residential stamp duty made up a huge portion of the increase, as the tax raked in $157 million in the nine months to March 31. This far exceeds expectations as the ACT government only forecast $120 million would be raised in the nine months.

The ACT budget tipped that $160 million would be received from the tax in 2020-21.

The government's quarterly financial report for March showed close to $4.5 billion of revenue for the ACT government was raised in the nine months, more than $41 million higher than budget forecasts but there is a deficit of $367 million.

Treasury attributed the revenue increase to the housing market performing better than expected. While higher than expected investment revenue also contributed to the rise.

"Higher than expected taxation revenue... associated with strong conveyance activity, including transaction volumes and prices across many segments of the market than expected at budget," the March quarter 2021 report said.

"This reflects low interest rates and rising confidence in Australia's ability to contain COVID-19 outbreaks."

Canberra's housing market has surged, Domain's most recent house price report puts the median house price at $927,577 - an annual growth of almost 20 per cent.

Domain says if prices continue to rise at the same pace, the median price will reach $1 million by the end of the month.

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Stamp duty is being phased out of the territory as part of the government's controversial 20-year tax reform program. Under the program, stamp duty costs decrease each year while residential rates increase.

Chief Minister Andrew Barr is expected to release the annual rates costs for each Canberra suburb for 2021-22 later this month.

Rates revenue is set to increase by 3.75 per cent but Mr Barr has already flagged further rates rebates due to the coronavirus pandemic.

Last year, Canberra ratepayers were give a $150 rebate as part of the pandemic stimulus.

Mr Barr said last month some form of rebate was likely while the pandemic continued.

The March year-to-date deficit for the March quarter was $367 million, this was $4 million higher than the budget. Government expenses were $22 million higher than forecast.

"This variance is mainly due to higher than anticipated employee expenses of $44.1 million largely due to the ongoing COVID-19 response," the March quarter report said.

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