On the elm-lined streets of Ainslie, a retired public servant opens her rates notice each July with the same quiet dread. She bought her weatherboard cottage in the 1990s, long before Canberra's tax system was redesigned, and has not sold, bought or transacted on any property since. Her bill keeps climbing anyway: general rates on inner-north units like hers rose by close to a fifth in the ACT's 2026-27 Budget alone, on top of several years of increases that have already outpaced her superannuation drawdown. She is not selling a house, buying one, or dodging a duty of any kind. She is simply the kind of long-settled owner-occupier the territory's tax reform was never designed to compensate — and, fourteen years into a twenty-year program, one of the households now carrying most of its weight.
Twenty years to retire one tax with another
In May 2012, the ACT Labor government, with Andrew Barr as Treasurer under Chief Minister Katy Gallagher, released the ACT Taxation Review, an inquiry chaired by former ACT Treasurer Ted Quinlan. Its central finding was that stamp duty — called conveyance duty in the ACT — is one of the most economically damaging taxes a government can levy, because it taxes the act of moving rather than the value of what is owned, and because its revenue swings wildly with the property cycle. The review recommended the ACT abolish conveyance duty and insurance duty altogether and replace the revenue with a broad-based property tax collected through general rates, the annual charge that, in the absence of a separate local council, already funds most ACT services (ACT Treasury, ACT Taxation Review, May 2012).
The government adopted the recommendation in the 2012-13 Budget and legislated a 20-year transition running to 2032. The Greens, governing partners with Labor for most of the program's life, have consistently backed the shift. Insurance duty went first and fastest: it was abolished from 1 July 2016, making the ACT the only Australian jurisdiction to have fully scrapped that tax (ACT Revenue Office, Tax Reform). On the commercial side, conveyance duty has also been progressively wound back: since 1 July 2018, no duty at all has applied to a commercial property transaction under $1.5 million, a tax-free threshold since lifted to $1.9 million and then, from 1 July 2025, to $2 million (ACT Revenue Office, Commercial transfer duty). Insurance duty and small commercial transactions, in short, have largely delivered on the promise.
Residential conveyance duty — the tax an ordinary home-buyer pays on settlement — is a different story, addressed below. The funding side of the ledger is general rates: an annual charge on every rateable residential and commercial property in the territory, calculated mainly on the unimproved value of the land. Because the ACT has no separate local government, general rates function as both a state-style land tax and a municipal rates bill combined, and it is this single charge that has absorbed almost the entire fiscal cost of retiring the transaction taxes (ACT Revenue Office, Tax Reform).
The strongest case
Stamp duty is a genuinely bad tax, and the ACT is the only government that has actually done something about it
The economic case for the swap is close to a consensus position among tax economists, and it does not come from ACT government talking points — it traces back to the 2010 Henry Tax Review and has been reinforced since by the Productivity Commission and independent bodies such as the Grattan Institute. Stamp duty is a transaction tax: it is levied only when a property changes hands, so it directly taxes moving. That "lock-in" effect discourages older Canberrans from downsizing out of family homes they no longer need, discourages workers from relocating for a better job, and discourages young families from moving closer to schools or work as their circumstances change — decisions a well-functioning housing market should make easy, not expensive. Because it depends on transaction volumes and prices, stamp duty revenue is also one of the most volatile lines in any state or territory budget, surging in booms and collapsing in downturns — a poor foundation for funding schools and hospitals. Grattan Institute modelling puts the national economic gain from replacing stamp duties with a broad-based property tax at up to $17 billion a year in additional GDP (Grattan Institute, Property Taxes, approx.), mainly because a broad, unavoidable tax on land distorts far fewer decisions than a large one-off tax at the point of sale.
Credit is due to the ACT specifically: it is the only Australian government to have committed to full structural implementation of this idea and stuck with it for well over a decade, through three changes of Treasurer and multiple elections, while other states have talked about the same reform and then abandoned it. New South Wales legislated an opt-in land tax alternative to stamp duty in 2022, and the incoming government scrapped it within a year of taking office; Queensland flagged and then dropped a first-home-buyer land tax swap in 2021. The ACT has kept publishing its schedule, kept legislating the annual rate increases needed to fund it, and kept absorbing the political cost of doing so budget after budget — a genuinely unusual instance of a government pursuing a textbook efficiency reform that delivers no ribbon-cutting moment and no popular photo opportunity, because the entire point is a tax nobody will ever see abolished at a press conference.
The evidence
Fourteen years into the twenty-year program, the ACT's own budget papers and an analysis commissioned by the territory's own Legislative Assembly show the reform running well behind schedule on the duty side, while the rates side has delivered in full — and then some.
The pattern shows up clearly across the last three budgets. Average household rates rose 3.75 per cent in 2024-25 and again by the same 3.75 per cent in 2025-26 — both years falling inside "Stage 3" of the government's own reform timetable, which ran from 2021-22 to 2025-26 and locked in that figure (ACT Budget Papers, 2024-25 and 2025-26). In the 2026-27 Budget, handed down by Treasurer Chris Steel on 10 June 2026 under Chief Minister Andrew Barr, the underlying general rates charge jumped to an average 8 per cent for residential and commercial properties — with individual increases ranging from around 4 per cent for houses in Belconnen to 13 per cent in Forrest and Griffith, and as high as 19 per cent for units in Ainslie (Region Canberra, reporting on ACT Budget 2026-27, June 2026). Layered on top has been a contested new levy: the 2025-26 Budget introduced a flat $250 annual "health levy" on every rateable property, later renegotiated down to $100 for residential and rural properties after public pressure, before the 2026-27 Budget scrapped it altogether from 1 July 2026 following a new Commonwealth health funding agreement — meaning even in the year the levy disappeared, the average total bill, levies included, still rose 5 per cent (ACT Budget 2025-26 and 2026-27).
On the other side of the ledger, the promised trade-off has not kept pace. An analysis prepared by Pegasus Economics for the Legislative Assembly's budget estimates committee, reported in July 2026, found conveyance duty is still projected to supply roughly a tenth of the ACT's own-source revenue in 2029-30 — with only two years left on the original 20-year timetable — while general rates are forecast to hold at around 29 per cent of own-source revenue from 2025-26 onward. General rates revenue alone is forecast at $944.2 million within a total ACT tax take of roughly $3.3 billion in 2026-27 (Pegasus Economics analysis, reported by the Canberra Times, 3 July 2026). The committee's own conclusion, as reported, was blunt: unless the government announces "dramatic changes" to both conveyance duty and general rates in forthcoming budgets, meeting the 2032 deadline is "extremely unlikely."
Fourteen years into a twenty-year plan, general rates have delivered on schedule. Conveyance duty, the tax the whole program exists to retire, has barely moved.
The critique: a swap that quietly stopped being neutral
The core problem is not that the ACT chose an efficient tax base — the case above is sound in theory. It is that, in practice, the reform has drifted from the revenue-neutral swap it was sold as in 2012 into something closer to a straightforward, compounding tax increase. The original design assumed rates would rise roughly in step with duty falling, so the territory's overall tax burden stayed broadly the same while its composition shifted from transactions to land. Fourteen years in, rates have risen every year — often well above wage growth — while conveyance duty has fallen only modestly and is still projected to supply around a tenth of ACT revenue in 2029-30. The gap between promise and delivery is now the central fact of the policy, and the sequencing made it worse: insurance duty and small commercial transactions were tackled first, while residential conveyance duty — the tax that actually touches most Canberra households buying a home — has been cut only gradually. Add the 2025-26 health levy saga, introduced at $250, cut to $100 after public pressure, then abolished entirely a year later once a Commonwealth funding deal removed the pressure that justified it, and the pattern looks less like a disciplined 20-year reform than a government reaching for whatever revenue tool is politically available in a given year.
Who actually carries the bill
That gap falls hardest on households the reform was never designed to compensate. A stamp duty cut only helps people who buy or sell property; a long-settled owner-occupier who has held the same home for decades gets none of the promised relief but pays the rates rise in full, every year, for as long as they stay there. Renters are exposed at one remove: landlords facing rates rises of 8 per cent or more in a single year have an obvious channel through which to pass the cost on — rent — in a market ACTCOSS's own cost-of-living reporting already describes as acute for low-income Canberrans, who have seen housing costs rise 22.8 per cent over the five years to 2024, well ahead of general inflation (ACTCOSS, Cost of Living Report, 2024). None of this is unique to a land tax in principle — switching from a transaction tax to an annual one redistributes who pays, from movers to owners — but it means the mobility benefits central to the government's case accrue mainly to people who transact, while the bill lands on people who do not.
The risk to the future
A reform that could deliver the worst of both taxes rather than the best of one
If the trajectory identified by the Legislative Assembly's own commissioned analysis continues unchanged, the ACT risks reaching 2032 — the original deadline — still charging most home-buyers conveyance duty on a typical purchase, while general rates will have risen for two decades straight and sit well above where they started in every household's budget. That is not a remote scenario: it is the base case in the analysis the government's own committee commissioned, which found the government would need "dramatic changes" in forthcoming budgets just to stay on the original schedule. A reform that never finishes what it promised, having already fully delivered the unpopular half, is a worse outcome for public trust than either sticking with stamp duty or completing the swap on schedule — it hands a future government the political cost of high recurrent rates with none of the credit for the abolished tax that was meant to justify them.
There is a fiscal dimension too. The ACT government's own budget remains in deficit through the reform's final stretch — $501.7 million in 2025-26 and $323.4 million in 2026-27, with a return to surplus not forecast until 2028-29 (ACT Budget 2026-27, June 2026) — and the Productivity Commission has separately warned that the territory's spending has been growing faster than its economic capacity to fund it over the years to 2023-24 (approx.). In that context, a rates system designed to be revenue-neutral becomes a tempting lever for general revenue-raising rather than duty replacement — and little in the last three budgets, from the health levy to the accelerating rate rises, suggests that temptation is being resisted. The risk for Canberra households is not that stamp duty gets replaced with something more efficient; economically, that would be a genuine improvement. It is that the replacement never fully arrives while the new tax keeps climbing anyway, and by the time voters notice, the swap is no longer revenue-neutral in anything but name.