Victoria Budget 2017: New-car buyers to pay more as stamp duty rate increases

NEW-CAR buyers will be slugged an extra $100 million a year as part of the latest Andrews Government tax grab.

New cars will cost more in Victoria due to an increase in stamp duty.

NEW-CAR buyers will be slugged an extra $100 million a year as part of the latest Andrews Government tax grab.

From July 1 the cost of new passenger cars will climb 1 per cent in Victoria, or $300 for a $30,000 car.

The sting will be included in a series of tax and duty changes in this week’s state Budget.

Since 2007, Victoria has had a lower stamp duty rate on new cars, to support local manufacturers.

But, following collapse of the state’s Ford and Toyota production lines, Treasurer Tim Pallas said it was time to end the measures.

“Due to the behaviour of the federal Liberal Party, which chased out car manufacturers in this state, those differential support mechanisms no longer support that purpose,” he said.

Treasurer Tim Pallas says it is time to end measures which lower stamp duty. Picture: Tim Carrafa

“We will be ending that decade of support ... new and used vehicles will ­attract the same stamp duty.

“It’s about a 1 per cent increase on stamp duty for purchases of new vehicles. That will mean the state will pick up an extra $100 million a year as a consequence of those changes.”

Other stamp duty changes in the Budget will include the closing of a loophole that allowed investors to avoid paying it by transferring property to the name of their spouse.

Mr Pallas also outlined plans to ­recalculate Victorian property prices every year, which will lead to more frequent but smaller rises in land taxes.

Mr Pallas said the move away from the current two-yearly property valuations would not result in higher land tax charges overall, but would mean more gradual rises rather than the “double whammy” every two years.

Victorian shadow treasurer Michael O'Brien has slammed the announcement.

But shadow treasurer Michael O’Brien said the announcements were “a series of broken tax promises”.

“This is just an attack on families and small businesses by a Premier who simply can’t afford his promises. He’s making Victorians pay the price for it,” Mr O’Brien said.

“By increasing stamp duty on new cars, Labor will discourage people from upgrading to newer, safer vehicles, putting motorists at greater risk.”

Mr O’Brien also claimed annual property valuations were an instrument for Premier Daniel Andrews to pursue land tax rises more frequently, which would also have an impact on the fire services property levy.

Real Estate Institute of Victoria chief executive officer Gil King said the move to annual property valuations simply changed the perception of land tax, rather than doing anything to ­address a growing problem.

STATE BUDGET: What we know so far

• $2 billion: For 2729 police officers, announced in December last year.

• $1.4 billion: Regional rail project for upgrades to Gippsland and Warrnambool lines and funding for Surf Coast Rail Project.

• $308 million: Protection against Victoria’s serious violent offenders including electronic monitoring, curfews, no-go zones and strict ­reporting requirements, new secure facility within Barwon Prison and upgrades to a maximum security women’s prison.

• $271 million: Melbourne Park tennis centre works including new 5000-seat sunken stadium, central terrace with a new elevated outdoor public space, function centre and two new match courts.

• $128 million: Victoria Racing Club for redevelopment of Flem­ington’s “Club Stand’’.

• $100 million tax grab: A 1 per cent increase to stamp duty for purchases on new cars, plus changes to land tax.

• $100 million: North East Link connecting the Metropolitan Ring Road at Greensborough, with either the Eastern Freeway or EastLink.

• $81.1 million: Ice Action Plan for early intervention and treatment for ice-addicted Victorians.

• $63.2 million: Monash Medical Centre emergency department expansion

• $10 million: New Melbourne Airport rail link development in partnership with the private sector

• $3.9 million: Geelong Kardinia Park upgrade and new grandstand