Stamp duty scrapped for first home buyers from next July

Based on an average of figures from the last three financial years, about 1000 homebuyers a year will be worse off due to the change.

However, Treasurer Andrew Barr said a range of experts had found the grants had not been effective in helping first-home buyers enter the market and had driven up house prices, and there would be a year-long transition to minimise the number of people adversely affected.

"To be honest it has been a first home sellers grant, not a first home buyers grant because the benefit has gone to those selling homes in that segment of the market," Mr Barr said.

"My expectation of what this will do after the one-year transition is it will open up first home buyers to range of supports they previously weren't able to buy in with government assistance, it will out some downward pressure on the demand-side that has been fuelled into a pretty small segment of market supply and importantly it achieves another step closer to our ultimate goal which is the abolition of stamp duty."

The measure will cost $1.3 million next financial year and $3.4 million over the forward estimates.

Stamp duty will fall about $1000 to about $23,700 for the median house price of $753,000, although stamp duty revenue all up will rise to $209 million, from $178 million last year.

The government will also dump stamp duty for commercial transactions for properties worth under $1.5 million from this July.

The change is expected to affect more than 70 per cent of commercial transactions.

The abolition of stamp duty is part of the ACT's 20-year tax reform, where the "inefficient" stamp duty is rolled back in favour of higher rates and land taxation.

About 48,000 houses and 39,000 units will see their general rates increase by $100-$150, while around 28,000 houses and 3200 units will have an increase of between $150-$200.

Ratepayers in the Gungahlin area will see the largest percentage changes (9 per cent for houses and 12 per cent for units) while Weston Creek will see the smallest (5 per cent for houses and 9per cent for units).

However to give unit owners more time to adapt changes in the way their rates were calculated in last year's budget, the government said it would extend the transition to the new methodology for another year.

This year, only properties with an average unimproved value of more than $600,001 will see a change to their rating factor, from 0.57 to 0.6013.

A Treasury spokeswoman said the extended transition would mean a "tighter distribution" of rates rises, meaning more people would see increases of 10 per cent and fewer would see the massive hikes of 45 per cent like last year.

Modelling from Treasury shows just 99 units will see general rates increases of more than 25 per cent while 7000 will see an increase of 9-10 per cent.

The spokeswoman said the extension of the transition would mean the government would sacrifice around some rates revenue this year, although the rates intake was growing.

She said the rates reform would return to its original trajectory next financial year.

However unit owners will lose the $100 rebate from last year's budget, and all ratepayers will lose access to the early payment discount from July 1.

The government has been phasing out the discount since the 2016-17 budget.

Around a quarter of ACT households received the discount, but with average rates at about $2400, the discount was only about $25, the Treasury spokeswoman said.

The change will save $1.4 million this financial year, and $6.4 million over forward estimates.

However the government has extended the aged deferral scheme for general rates by removing income and unimproved land thresholds. Now all property owners aged over 65 years can defer their rates until the sale of their property, a measure expected to cost $50,000 this year.