Stamp duty could be scrapped in Victoria if inquiry finds alternative

An inquiry will look at suitable alternatives to stamp duty in a bid to ditch the “massive hurdle for people who want to get into the housing market”.

A Parliamentary inquiry investigating alternatives to stamp duty is preparing to get underway and has called on submissions from members of the public.

The Legislative Council’s Economy and Infrastructure Committee will consider how stamp duty impacts the labour and housing markets, as well as its overall tax efficiency, over a six month period.

Individuals and organisations are invited to make submissions, including any potential alternatives to land transfer duty.

Animal Justice MP and committee chair Georgie Purcell said the inquiry will examine if reforming stamp duty could improve housing affordability and free up the number of properties put on the market.

“Other jurisdictions have moved to review stamp duty. That could have big implications for housing supply, labour mobility and for ongoing state revenue,” Ms Purcell said.

Submissions close on April 14.

It comes after The Herald Sun reported that Victorians may not have to pay stamp duty when buying a property if the inquiry identifies a suitable alternative to land tax.

Stamp duty could be scrapped if a new inquiry identifies a suitable alternative.

A motion introduced by Liberal Democrat David Limbrick for an inquiry into stamp duty passed the Victorian upper house on Wednesday.

Mr Limbrick said stamp duty was “a massive hurdle for people who want to get into the housing market”.

“There is a lot said about housing affordability, homelessness and about inequality. There is going to be a lot more said about it as interest rates rise and as international students and backpackers return to Australia,” Mr Limbrick told the chamber on Wednesday.

“The aim of this motion is to get the wheels moving so something can be done about it.

“Someone buying a house in Melbourne at the median price of $746,000 will pay nearly $40,000 in stamp duty. If it’s their first home, they will pay nearly $39,000. Every time you raise the bid by $10,000, stamp duty goes up by $600.”

Mr Limbrick said the Liberal Democrats “hate taxes” and hoped the inquiry would find other ways to pay for Victoria’s debt.

“Stamp duty is often cited by economists as one of the least efficient taxes,” he said.

“We don’t think it is right or moral to leave debt to future generations. So this inquiry would be about investigating alternatives.”