Stamp duty switch, GST increase at the centre of tax reform blueprint
The Andrews Government is considering dumping stamp duty and replacing it with an annual tax on homeowners. Now, a reform blueprint has been released which explains how the transition could happen.
VIC News
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A reform blueprint has been unveiled to wean state governments off stamp duty and instead charge homeowners an annual land tax.
The landmark review, ordered by the New South Wales Government and welcomed by Victoria, proposes a series of transition options to switch from the upfront charge which experts say forces up house prices, discourages moving and restricts new developments.
Homeowners could choose which tax they pay during a voluntary opt-in period, or switch to the annual charge when buying a new house. State governments could also refund stamp duty that has already been paid, or gradually phase out stamp duty while phasing in annual charges.
The Andrews Government is actively considering the tax switch but wants consistent and transparent Commonwealth funding to make it happen.
Victorian Treasurer Tim Pallas said he shared the view of his NSW counterpart Dominic Perrottet that “there’s never been a better time for economic reform”.
“We can’t pretend we can return to a position of consistent economic growth without it,” he said.
“The coronavirus pandemic has shown us that we are better when we work together, and we’re only too happy to be front and centre of the positive discussions that will make our country better and fairer.”
The review was released on Wednesday, the 20th anniversary of the introduction of the goods and services tax, and it also called for state governments to work with the Commonwealth to raise the rate of the GST or expand the base to which it applied.
Prime Minister Scott Morrison has argued against lifting the GST, but when asked this week if he would consider taking such a proposal to the next election, he said he was focused on more immediate economic issues.
The Andrews Government has also slapped down calls to increase the GST but the Herald Sun understands Mr Pallas is opening to talking with the Commonwealth about how the $60 billion revenue stream operates.
The long-awaited NSW review was authored by a high-powered independent panel including ex-Telstra boss David Thodey and experience bureaucrat Jane Halton, who Mr Morrison also appointed to his National COVID-19 Coordination Commission.
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