State governments have been encouraged to follow the lead of the ACT and abolish stamp duty, but it's unlikely to happen without Commonwealth support.
ACT Treasurer Chris Steel announced all first home buyers would be exempt from paying stamp duty on property purchases from July 1 as he unveiled the budget for the territory, which hosts national capital Canberra, on Wednesday.
The move is a significant milestone in ACT Labor's 20-year journey to abolish the tax in its entirety and replace it with higher property rates.
Andrew Leigh, a federal assistant minister and a former economist, commended the territory for its nation-first reform.
In a paper that Dr Leigh co-write while working as an academic at the Australian National University, he showed that higher rates of stamp duty reduced mobility and discouraged people moving to homes that suited their needs.
