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Hot Topic – Stamp Duty

PPG_BLog_Nov_Image-8_Stamp-duty-300x258In Australia, and particularly Victoria, State Governments have relied more and more on Stamp Duty, paid by property purchasers, to fund a big part of their annual budget expenditure.

Over the years, particularly through a time when the property market has been very strong, Stamp Duty revenues have continued to grow.

The Real Estate Institute of Victoria (REIV) and its members have lobbied hard from the past 15 years to try to encourage various State Governments to move their revenue collection emphasis to other areas so that the property sector was not unfairly treated.

The current State Government made some changes to Stamp Duty for first home buyers, which was helpful for that sector, but the vast majority of purchasers are still paying close to the highest Stamp Duty rates in Australia.

Enzo Raimondo, Chief Executive of the Real Estate institute of Victoria, recently expressed his opinion on problems associated with Stamp Duty, saying that the current system is not fair and that a range of reforms should be introduced to make the current system fairer.

Some of these reforms include the removal of stamp duty on GST (tax on tax), the cessation of higher stamp duty rates on investors and the indexation of duty rates so the proportion of tax paid does not increase.

The REIV, and indeed most experts, acknowledge that it is not possible to simply remove the tax as the state government would require a revenue source to replace it. Whether or not the suggested reforms are introduced at some point remains to be seen but we will continue to lobby our local politicians – time will tell !

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