The ACT Government’s 2026-27 Budget has made a bold and nationally significant move in becoming the first jurisdiction in Australia to abolish stamp duty for all first home buyers – a decisive step in the Territory’s long-term tax transition. This raises an important question about whether demand-side relief and broader investment in housing supply will translate into meaningful outcomes.

A national first

From 1 July 2026, first home buyers in the ACT will no longer pay stamp duty, removing one of the largest upfront costs associated with buying a home.

The reform is positioned as a response to cost-of-living pressures, aimed at improving access to home ownership for younger households. The Budget also includes a broader expansion of concessions, for pensioners, eligible NDIS participants and certain returning buyers, as well as measures that remove or reduce stamp duty on newly constructed and ‘missing middle’ homes purchased by owner-occupiers.

Combined, these changes mark a clear continuation of the Territory’s long-term tax reform agenda, while prioritising housing affordability in its policy settings.

Pairing demand with supply

Stamp duty exemptions are part of a substantial housing package, with the ACT Government committing $770 million to new and expanded initiatives aimed at strengthening housing access and supply.

This includes a continued commitment to enable 30,000 homes by 2030, supported by:

• A pipeline of land release and precinct planning
• Ongoing planning reform and technical studies to support development sequencing
• A strong focus on increasing housing diversity.

There is also a significant uplift in public and community housing investment, including more than $360 million to deliver an additional 450 public dwellings and further funding to upgrade and maintain the existing stock.

The ACT Government is also supporting community housing delivery through financial guarantees that could unlock substantial additional investment via the Housing Australia Future Fund. These measures attempt to balance immediate affordability pressures with longer-term supply objectives.

‘Missing middle' housing reform

'Missing middle’ housing refers to low- to medium-density homes that sit between detached suburban homes and high-rise apartment buildings. It is considered ‘missing’ because, in many Australian cities, relatively few of these in-between housing types are being delivered today, despite strong demand.

This Budget includes targeted reform of ‘missing middle’ housing, including terraces, townhouses and low-rise multi-occupancy developments. Key measures include:

• A temporary 50 per cent remission of Lease Variation Charges for eligible developments
• Expansion of stamp duty concessions for newly built unit-titled and turn-key homes
• Investment in the Canberra Housing Pattern Book, providing pre-approved housing designs to streamline approval processes.

These initiatives are intended to reduce development cost and expedite construction timeframes, particularly within established urban areas. They are practical interventions aimed at addressing the barriers that can slow or stall housing projects.

Other notable announcements:

• $182.6 million in new initiatives over four years to strengthen the community services sector and improve responsiveness. The funding focuses on key priority areas, including domestic and family violence services, homelessness and housing support, community legal assistance, and emergency relief measures. This investment responds to rising demand for frontline services and continued policy emphasis on supporting vulnerable Canberrans.
• $143.5 million over four years to boost economic development, tourism, arts and sport. The investment strengthens Canberra’s cultural identity, visitor economy and creative industries, including a 25 per cent increase in arts funding and continued progression of the new National Convention and Entertainment Centre. It also invests in community liveability through major sporting infrastructure upgrades, such as the $37.5 million Belconnen Basketball Stadium expansion, alongside support for events, women’s sport, and grassroots participation.
• $343.1 million over four years to improve transport, city services and climate resilience, focusing on stronger connectivity, liveability and sustainability across the Territory, including rail and light rail upgrades and more accessible public transport. It also prioritises environmental outcomes through investments in energy efficiency, climate action programs, community-led initiatives, and measures to enhance water security and biodiversity, supporting a more sustainable and resilient city.

BDO comment

Demand-side measures such as stamp duty relief can provide immediate support for buyers, but the pace of new housing delivery through planning, land release and construction will be critical in determining whether affordability improves over time.

The inclusion of feasibility measures, such as Lease Variation Charge remissions and planning improvements, reflects an awareness of the constraints and pressures that developers face. As with previous housing programs, delivery will be a key factor. The ability to maintain momentum across land release, infrastructure coordination and construction activity will impact how quickly Canberrans can expect new homes to be delivered.

The other notable spending measures reflect a Budget that seeks to balance immediate cost-of-living and community service pressures with longer-term investment in liveability, productivity and resilience. However, given the Territory’s ongoing fiscal constraints, the effectiveness of these initiatives will depend on disciplined prioritisation, clear delivery milestones and the Government’s ability to convert investment commitments into measurable outcomes for Canberrans.

Delivery is the defining factor

The ACT Government’s decision to abolish stamp duty for first home buyers is a national first and reinforces the role of tax reform in addressing housing affordability.

By pairing this with investment in social housing and disciplined infrastructure choices, the Budget outlines a broad-based approach to tackling fiscal challenges, whilst strengthening the foundations of a resilient, growing economy.

Overall ACT Budget position

The ACT Budget shows a deficit for 2026-27 of $323.4 million, with a return to surplus now not due until 2028-29.

Whilst the government has made some progress in closing the gap, external pressures such as the war in the Middle East and rising fuel price increases have not only impacted government finances but limited its ability to increase taxes and charges. 

While revenues are expected to trend upward, rising by $16.3 million in 2026-27 and $607.9 million over the three years to 2028-29 compared to the 2025-26 Budget Review, this improvement is outpaced by expenditure growth.

Spending is projected to increase by $262.5 million in 2026-27 and $980.8 million over the same period, placing continued pressure on the ACT’s fiscal position. This divergence between revenue and expenditure growth suggests that absent further policy adjustments or stronger-than-expected revenue performance, budget repair will remain constrained in the near to medium term.

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