The upper house’s economy and infrastructure committee has also urged the Andrews government to regularly review stamp duty rates to tackle bracket creep,as well as advocate for a national approach to stamp duty reform.
Chief economist at AMP Capital Shane Oliver said Tuesday’s recommendations were disappointing given stamp duty was a “massive upfront cost” for young people and a disincentive for empty nesters looking to downsize.
“It is the No.1 tax most economists would want to get rid of,” he said. “It distorts people’s decisions to buy and sell,whereas a land tax is just an ongoing,relatively modest tax.”
Loading
Stamp duty is determined by the sale price of a home or the property’s market value,whichever is greater. A home with a dutiable value of $745,000 will incur about $40,000 in stamp duty.
Animal Justice Party MP Georgie Purcell,who chaired theLegislative Council inquiry,said the final report stopped short of calling for stamp duty to be abolished because a viable alternative was not yet clear.
“While people don’t like stamp duty – it’s a highly contentious tax – it’s not as simple as just abolishing it,” she said. “It contributes a really significant amount to Victoria’s state budget and getting rid of it would severely impact service delivery.”