Grattan Institute economic policy program director Brendan Coates said Victoria’s heavy reliance on stamp duty was costing the economy up to $5 billion a year,and now was the time to make the change to improve housing affordability and boost productivity.
“Stamp duty is a really unfair tax because it punishes those who are often younger and looking to buy their first home,and it stops people from moving to a better job,” Coates said.
“We can’t afford a situation where older Australians can opt out of the tax system for decades while they continue to draw on publicly funded services,which is what happens with stamp duty.”
The Grattan Institute’s submission to the parliamentary inquiry states Victoria has one of the least efficient tax systems,with each dollar of revenue raised costing the economy 30¢.
The independent think tank said stamp duty penalised younger people who tend to be more mobile,and described it as a defacto tax on divorce. Coates found stamp duty was a big reason why more than half of divorced women,who lose their home when the assets are split,do not buy again.
Victoria’s upper house in February voted to establish awide-ranging inquiry into stamp duty and will investigate its impact on housing supply,labour mobility and the overall efficiency of the tax system.