In an attempt to boost dual occupancy, the ACT has announced plans to introduce a new stamp duty exemption for dual occupancies on large suburban residential blocks.
Coinciding with the launch of the new Territory Plan – ACT’s central planning document – any block over 800sq m in residential zone 1 (RZ1) will be allowed to accommodate a modest second dwelling of up to 120sq m of floor space.
While owners of larger RZ1 blocks are currently allowed to build a small secondary residence that has up to 90sq m metres of floor space, owners are unable to split the block into two titles, hence they cannot sell the second dwelling.
Under new arrangements, owners will be able to unit title the second dwelling and sell it off individually.
Improved affordability
Given that the ACT is one of Australia’s fastest-growing jurisdictions, with significantly higher housing and rental prices than most cities, the ACT government expects new policy to create more homes in existing suburbs and improve affordability.
While Master Builders Association ACT CEO Michael Hopkins has welcomed the zoning changes, he doubts it will result in significantly more housing.
He notes changes appeared to include “fairly significant constraints” on “minimum lot size, maximum area of the dwelling, and rules around tree canopy and protecting streetscapes”.
73% of Canberra blocks qualify
To understand the significance of this new ruling, it’s important to note that around three quarters (73%) of all (Canberra) blocks have an RZ1 zoning, which allows for a single, detached house.
Overall, ACT land data suggests there are around 45,000 blocks large enough to be eligible.
While most of these blocks are in Tuggeranong in the south and Belconnen in the north-west, it’s understood that virtually every block in Forrest, O’Malley, Weetangera and Turner is large enough to qualify for new dual-occupancy rules.
Stamp duty & LVC changes
ACT Chief Minister Andrew Barr expects the stamp duty exemption along with proposed LVC changes to provide more opportunities for Canberrans to find a home; including existing families looking to downsize in the suburbs they’ve called home for many years.
Effective 27 November until 30 June 2026, the stamp duty exemption will apply to the first transfer of unit-titled dwellings on suburban residential blocks for purchases valued up to $800,000.
Also effective 27 November are changes to the lease variation charge (LVC) – a windfall gains tax – to support the development of more dual occupancy homes in Canberra.
Between the commencement of the new Territory Plan and 30 June 2026, the government will let lessees choose how the LVC is calculated for a maximum number of dwelling lease clauses on RZ1 blocks, between the codified values or 75% of the value uplift as measured by an accredited valuer.
This is expected to put the choice in the hands of the lessees as to whether they prefer the certainty of the codified values or the flexibility to seek a bespoke valuation to test the value uplift.
The temporary LVC changes will also enable the government to monitor developments and sales to ensure codified values are then set at the right level.
