Inquiry into Land Transfer Duty Fees

On the 21^st of March 2024, the Victorian Government provided its response to the Economy and Infrastructure Committee’s (the Committee) report titled Inquiry into Land Transfer Duty Fees (Inquiry). The Committee is made up of MPs from the Legislative Council and inquires into and reports on proposals, matters, or things concerned with agriculture, commerce, infrastructure, Industry, major projects, public sector finances, and transport. The Committee welcomed submissions and hearings from various stakeholders to ensure a broad and robust conversation on stamp duty (land transfer duty) and the Victorian taxation system.
 
The REIV has advocated heavily for wholesale tax reform across the suite of property taxation that the Victorian Government is responsible for collecting and welcomes any ongoing consideration into reducing or abolishing ineffective taxation settings. The REIV has a sustained policy position that Victoria requires increased supply to overcome the current housing crisis and that effective taxation is a key driver for achieving the necessary housing provision.
 
The cornerstone piece of housing policy that the Victorian Government has introduced is Victoria’s Housing Statement. This statement sets a target to build 800,000 homes in Victoria over the next decade. This ambitious proposition will require brave reform, and the REIV believes that amending the state’s current property taxation settings to encourage investment and bolster supply is an integral part of achieving the Victorian Government’s housing goals. The REIV welcomes the Victorian Government’s commitment to reviewing stamp duty policy settings and priorities as is noted in its response to the Inquiry.
 
The Inquiry announced three recommendations that the Victorian Government either support in principle or in part. In principle support indicates that the Victorian Government supports the intent or merit of the policy underlining the recommendation without necessarily supporting the policy’s method, whilst in part support indicates that the Victorian Government supports some elements of the recommendation.
 
The recommendations are:
 

• That the Department of Treasury and Finance model and publish the findings of ‘switch on sale’, ‘credit’ and ‘gradual transition’ proposals. The Victorian Government supports this recommendation in part and has noted that it receives regular modellings and advice from the Department of Treasury and Finance on tax and policy setting, inclusive of stamp duty.

• That the Department of Treasury and Finance should regularly review stamp duty rates to adjust for bracket creep. The Victorian Government supports this recommendation in part and has noted that it receives regular modellings and advice from the Department of Treasury and Finance on tax and policy setting, inclusive of stamp duty.

• That the Victorian Government:

  • Should consider additional measures to increase housing supply, including strengthening housing targets.

  • Advocate for a national approach to stamp duty reform, recognising its potential to address housing affordability and accessibility nationwide.

  • As an interim measure until a national commitment is made, urgently explore state-based reform options, including conducting an investigation into the feasibility of abolishing stamp duty and implementing a broad-based land tax as an alternative.

The Victorian Government supports this recommendation in part and has noted the targets introduced in Victoria’s Housing Statement, in addition to its willingness to engage with the federal and other state governments on tax settings whilst reviewing all tax and policy settings as part of its annual Statement budget process.
 
The REIV will continue to monitor government activity in relation to property tax reform in Victoria.

Report

REIV Submission