Victoria’s major parties are urged to follow NSW and exchange stamp duties for a land tax system.
The Victorian Chamber of Commerce and Industry released its policy platform for the 2022 state elections on Wednesday, 73 days before voters head to the polls.
The 61 recommendations include Victoria replacing stamp duty with a broad land tax system, pending a planned adjustment in NSW from next year.
Beginning in January, first-time homebuyers in NSW will be able to choose between a one-time stamp duty or an annual property tax of up to $1.5 million.
The properties would not be locked up in the tax if they are sold.
It was a good first step and Victoria should keep an eye on the NSW system and move to a similar model, said VCCI chief executive Paul Guerra.
“We don’t have to be the first. We just have to be the best,” he told reporters.
Replacing stamp duty would allow for greater labor mobility and make first-time homebuyers less reluctant to sell their homes within a few years of paying a large one-time sum, Guerra said.
Raising Victoria’s payroll tax threshold from $700,000 to $1.2 million to match NSW would also deter businesses from moving across the Murray River.
“We need to be at least as competitive as NSW,” said Mr Guerra.
Victoria’s metropolitan payroll tax rate of 4.85 percent is lower than NSW’s national figure, which has returned from 4.85 to 5.45 percent as of July 1.
It drops to 1.21 percent for businesses in regional Victoria, and VCCI would like to get rid of it altogether.