The Real Estate Institute of Victoria (REIV) is calling on the Victorian Government to replace the land transfer tax (stamp duty) with a broad-based tax.
The lobby group says a broad-based tax will avoid inefficient and disproportionate effects of house price bracket creep, as well as provide a more stable and predictable revenue stream for government.
The REIV has submitted to government that stamp duty is not only a hit to homebuyers financially, but curbs labour and capital mobility. The peak body has reiterated that the financial pressure that comes with the tax impacts decisions regarding relocation for employment, personal preference, and downsizing or upsizing based on housing requirements.
“The REIV has long sought an abolishment of this tired tax,” says the institute’s CEO Quentin Kilian.
“Stamp duty has created an excessive burden on home buyers for far too long, with fees for the median priced house currently sitting at approximately 48.9 per cent of Victorian’s average annual income.”
Revenue collected by the State Government in 2021-22 from stamp duty was $10.3 million.
“The nature of land transfer tax is dependent on market activity and performance, which impacts government revenue predictability,” Kilian says.
“Recent economic fluctuations, such as limitations on real estate activity during Covid and increases in interest rates, influence individual decisions to engage or not engage with housing markets, further impacting government revenue.
“As stamp duty increases the cost of moving, people may choose to remain where they are rather than pursue job opportunities elsewhere – contributing to the lack of skilled labourers in areas of need, negatively effecting productivity,.”
