And while previous buyers would not be affected, the move to a land tax would be permanently tied to the property. This means that future landlords would have to pay land tax if the previous landlords had opted for it.
The Victorian government remains cautious about what some see as politically risky reform five months before the Nov. 26 election, especially as the state struggles with an energy crisis, rising inflation, rising interest rates, and budget challenges. and a very stretched hospital system.
Matthew Kandelaars, executive director of the Victoria Urban Development Institute, said there was universal agreement that the stamp was a “terrible and inefficient tax” and urged the government to seriously consider a similar review.
“The current dependence on the stamp duty budget … puts the eggs of Victoria’s economic upturn in a basket,” Kandelaars said.
“In the midst of inflationary pressures and rising interest rates, the real estate market is under pressure. Tax reform to reduce the burden on home buyers and remove barriers to entry will reduce the risk of the state’s economic recovery. “
A survey of 1,000 people conducted by the institute last October found that 43 percent of those surveyed with a mortgage thought that removing the stamp duty would make housing more affordable.
The Victorian Executive Director of the Australian Property Council, Danni Hunter, agreed that the stamp duty was an inefficient and too onerous tax that required a rethink.
He said that if the federal government supported the push for reform, including agreeing to address revenue deficits, it would provide a powerful incentive for other states to continue NSW.
But Hunter said any decision in Victoria would need careful consideration, with enough time for the consultation needed to get the design right.
“The stamp duty is an incredibly inefficient tax,” he said. “It is a barrier and a burden for many people who want to change their housing situation or enter the housing market. So, bottom line is that we need to talk about better taxes, not more. “
The Victorian Executive Director of the Housing Industry Association, Fiona Nield, said Victorians were already paying Australia’s highest stamp duty.
“We see the stamp duty as one of the most inefficient taxes,” Nield said. “It affects people’s decision-making to buy a home, it’s a barrier for people to enter the housing market, and it actually discourages people from moving house.”
He said it also discouraged older Victorians from downsizing, which meant the housing stock was underused.
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Federal Treasurer Jim Chalmers told The Age last week that his government wanted to work with states to “address the substantial challenges we all face in the economy and our budgets.”
Last year, the Victorian government accumulated about $ 6.4 billion in stamp duty, equivalent to approximately 27.2 percent of the state’s total tax revenue. The NSW government raised $ 9.4 billion in stamp duty, or 28% of the total tax.
The NSW government has estimated that, once introduced, an optional annual tax would raise approximately 20% less revenue, equivalent to a projected deficit of about $ 2.5 billion a year. In Victoria, the figure is believed to be close to $ 2 billion.
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