In July the ACT government will abolish stamp duty on commercial purchases worth less than $1.5m as part of efforts to bolster investment and make it easier for small businesses to own their premises.
Colliers International expects the move will eliminate duty on around 70% of all commercial transactions in the ACT. Before July 2017, the conveyance duty on a commercial property of $1.45m would have been $73,710, this fell to $35,550 in July of last year, and will become zero this year.
“This can be a significant upfront cost for a small business trying to manage its cashflow,” Colliers International manager for investment services Winter said. “Removing this expense could mean that a small business operator who previously thought owning their own premise was completely out of reach can now seriously consider this option.”
Winter added that small business owners will need to weigh the pros and cons of either owning their own premises or renting. Those who choose ownership will have control in when it comes to the design and layout of their buildings –and will also know what their mortgage costs are each month, as opposed to rents, which can sometimes be unpredictable. Those who rent, meanwhile, are able to move more easily if they need to expand, and are less tied to the costs of maintaining the property.
“The conveyance duty abolition will also make the ACT more attractive for commercial property investment by making it cheaper to purchase here, which in turn increases potential returns, and make the Territory more competitive when weighed against other jurisdictions,” Winter said.
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