Vic opposition vows to scrap stamp duty

The stance has followed the release of the Labor government’s Victoria budget 2021-22, in which it said that it would introduce a new land transfer duty threshold for high-value transactions for contracts entered into from 1 July 2021.

The budget papers said that for property transactions with a dutiable value above $2 million, the land transfer duty payable will increase to $110,000 plus 6.5 per cent of the dutiable value in excess of $2 million.

Other measures in the budget included a windfall gains tax associated with planning decisions to rezone land, with the total value uplift to be taxed at 50 per cent for windfalls above $500,000, with the tax phasing in from $100,000, and an increase to land tax rates for taxpayers with larger property holdings.

In its budget reply speech, Victoria’s Liberal Nationals opposition party criticised the measures, arguing that the Labor Party wished to increase the stamp duty tax to repair the budget deficit, “including billions of dollars of waste on botched infrastructure projects”.

It also argued that the COVID-19 crisis had passed, and as such, the Daniel Andrews Labor government has had sufficient time to plan for the state’s economic recovery.

“Instead, we get higher taxes, on families, small business and investment to pay for decisions made on the run,” the Liberal Nationals said in a statement.

“Despite promising not to increase taxes when elected, Daniel Andrews has introduced or increased 38 taxes on Victorian families and businesses.”

Leader of the opposition in Victoria Michael O’Brien said that it was an inappropriate time for the Labor government to increase taxes, reasoning that the economy is “so fragile”.

He said: “Making home ownership and rents less affordable will put our economic recovery at risk. The Andrews Labor government has lost control of the budget, and its only plan is to increase taxes on families and small businesses.”

Shadow treasurer Louise Staley said: “We need to grow Victoria’s economy, not slam it with new and increased taxes on small businesses and family homes.

“Dan has no plan, and it’s putting the economic recovery at risk that Victorians worked so hard to earn.”

The Liberal Nationals’ plan to scrap the stamp duty increase if elected has been welcomed by the Property Council of Australia (who recently slammed the budget measures) as well as the Real Estate Institute of Victoria (REIV).

In addition, the council urged the opposition to proceed a step further and commit to also repealing the windfall gain tax if passed through Parliament within the first 12 months of taking office.

It said: “As highlighted in our submission to the Victorian government, stamp duty is an inefficient tax which only hurts Victorian home buyers and businesses. It is incredibly disappointing to see the government decide to increase an inefficient tax, just as other states like New South Wales look to move away from stamp duty as part of its tax reform agenda.”

The council also welcomed the announcement of Victorian Treasurer Tim Pallas at the Property Council’s budget breakfast that the government would consult with industry on the windfall gains tax.

“We will continue to call on the government to consult with industry and support a property-led economic recovery,” it said.

While welcoming the opposition’s response to the Labor Party’s budget measures around property, REIV president Leah Calnan called for the “fundamental restructuring” of Victoria’s property tax regime to become a priority in any political agenda.

Ms Calnan said: “Unless there’s a significant shift in the thinking and action on property tax, Victoria will become a less desirable place to invest, ultimately harming jobs and the economy.

“The Victorian government has for too long burdened Victorians with increases to property tax, to the point where today property accounts for more than 40 per cent of government revenue.”

REIV CEO Gil King said the REIV would be open to having informed discussions on taxation for the sector.

He said: “It’s clear to the thousands of people working in residential and commercial property in Victoria that regulators and policymakers would benefit from an increased understanding of the sector and its contribution to the state, both economically and socially.

“We look forward to working with all layers of government and sides of politics to help ensure a thriving industry that serves the long-term interests of Victorian families, businesses and the broader economy.”

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[Related: Victoria releases the 2021-22 budget]