The Tasmanian Government has extended its popular downsizing stamp duty reduction for a further two years, but unfortunately not increased its strict home price cap despite booming prices in the Apple Isle.
As part of the Tasmanian Government’s delayed 2020-21 budget, it confirmed that the stamp duty incentive would be extended to 30 June 2022. The concession will cost the government $1.3m in 2020-21, up from $1.2m on 2019-20.
The concession provides a 50 per cent discount on property transfer duty for eligible pensioners who sell their former home in Tasmania and downsize by buying another home in Tasmania. The new property must have a dutiable value of $400,000 or less and also have a dutiable value less than the former home.
The concession is available where:
the transfer associated with the sale of the former home completes between 10 February 2018 and 30 June 2022 (inclusive); and
the transfer associated with the purchase of the new home completes within six months (either before or after) the transfer (selling date) of the former home.
To be eligible, the pensioner must have occupied the former home as their principal place of residence for at least six months, and intend to live in the newly purchased home for at least six months, commencing within 12 months after its purchase.
While the stamp duty extension is welcome, the decision to not increase the $400,000 cap is a tough one to swallow, given Tasmania’s strong and rising property market.
According to the Australian Bureau of Statistics, the median price of an established house in Hobart in June 2020 was $465,000, while in the rest of the State it was $340,000.
Meanwhile, the median price of attached housing in Hobart was $385,000 and $291,500 in the rest of the State, also in June 2020.
This means it’s unlikely the concession can be claimed, unless the downsizer is moving from a house in Hobart to an apartment in Hobart or an apartment or house in the rest of the State.