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Reducing land tax and helping Tasmanians into the housing market

26 August 2021

Michael Ferguson MP

Minister for Finance

The 2021-22 Tasmanian Budget delivers savings on land tax and targeted stamp duty relief to put more money back in the pockets of Tasmanians.

We acknowledge that our strong economy has put upward pressure on land values and we have responded with measures which include increasing the bottom threshold for land tax from $24,999 to $49,999 and the top threshold from $350,000 to $400,000. Tasmanians will have already started to notice these reductions in their bills.

These changes benefit Tasmanian land owners with an additional 4,100 paying no land tax at all and about 70,000 receiving reduced bills of up to $613 per year. This amounts to a nearly $60 million reprieve for property owners over the next four years.

In addition, the changes allow land tax bills of over $500 to be paid in three instalments over the year, and reduces the premium rate of penalty interest from 8 per cent to 4 per cent.

In line with our election commitment, the Government is further reviewing the land tax structure in our State with possible options including capping the level of future increases and the introduction of a foreign investor land tax surcharge.

We’re also making it easier for Tasmanians buying or building a home.

We’ve done this by extending the First Home Owner Grant from $20,000 to $30,000 for Tasmanians building their first home with effect from 1 April 2021 and will run until June 2022.

The 2021-22 Budget includes $7.5 million for the boost to the First Home Owner Grant making total funding across the Budget and Forward estimates of $49.8 million to assist Tasmanians build their first home.

This is in addition to the ongoing $30.3 million across the Budget and Forward Estimates for payments under the Tasmanian HomeBuilder Grant scheme to help Tasmanians build a new home, support jobs in the building and construction sector and grow Tasmania’s economy.

We also appreciate that not all Tasmanians will want to build a new home and that conveyance duty is a significant impost on those buying a home.

When the Government introduced its 50 per cent duty concession for first home buyers and pensioners downsizing to a smaller home in 2018, the $400,000 threshold was above the State’s median house price.

That’s why the Government introduced legislation in June this year to increase the eligibility threshold for the concession from $400,000 to $500,000.

This Budget reflects the reduction in conveyance duty revenue attributable to the increased threshold. The impact of these duty concessions is estimated at $6.8 million.

This measure complements the Government’s significant investment in grants to support Tasmanians building a home, including the Tasmanian HomeBuilder Grant scheme which applied to eligible contracts entered before 31 March 2021 and the First Home Owner Grant.

The Tasmanian Liberal Government is securing Tasmania’s future by improving the affordability of owning or renting your own home.