Premier says he is ‘unconvinced’ about the merits of abolishing stamp duty in favour of an annual land tax

Daniel Andrews has all but ruled out any prospect of dumping stamp duty in favour of an annual land tax.

Daniel Andrews has all but ruled out any prospect of dumping stamp duty in favour of an annual land tax.

The Premier said he was “unconvinced” that such a move – similar to a system currently used in New South Wales where residents can instead opt to pay a broadbased tax – would benefit Victorians.

A parliamentary inquiry is currently probing alternatives to stamp duty by investigating how the tax impacts the labour and housing markets, as well as its overall tax efficiency.

In its submission to the inquiry, the Department of Treasury and Finance revealed stamp duty now accounts for 34 per cent of the state’s total taxation revenue.

A parliamentary inquiry is currently probing alternatives to stamp duty.

In 2021-22, state coffers reaped $10.4bn off stamp duty, an increase of more than $8bn compared to 2004-05.

Both the state opposition and Greens both support abolishing stamp duty in favour of an annual land tax.

Such a move would echo a similar scheme introduced in NSW by former Liberal Premier Dominic Perrottet that allows residents to opt in to an annual tax instead of stamp duty.

Newly elected Labor Premier Chris Minns has since confirmed that measure would be scrapped on July 1.

Mr Andrews said he didn’t believe the scheme would provide any benefits to Victorians.

“I’m not entirely certain that it is everything that people make it out to be,” he said.

“You had a policy decision made in NSW, then when it got implemented it went from being a compulsory scheme with all these macro benefits … then it became an optional scheme.

“I don’t even think that it necessarily delivers what people say it delivers.

“I am unconvinced about the merits of that particular proposal.”

Mr Andrews said while he understood that “everybody would like to pay less stamp duty”, the tax played an integral role in funding key public services.

“It’s not quite as easy as ‘we don’t like that particular revenue measure, let’s just get rid of it’,” he said.