Brumby under pressure to cut stamp duty

September 9, 2008 - 1:43PM
• Natalie Craig - The Age
  

The Victorian Government is under pressure to cut stamp duty after Queensland abolished the charge for first home buyers for properties under $500,000.

- Brumby under pressure to cut stamp duty
- Queensland increases exemption to $500,000
- Victoria now highest charges in nation

Victoria now has among the highest stamp duty charges in the country, according to the Property Council, and will lose its competitive advantage over other states if it continues to charge tens of thousands of dollars for the transfer of land.

"In Victoria you're still looking at up to $30,000 stamp duty on your first home,'' said Caryn Kakas, executive director of the council's residential development division.

"Queensland has just upped the ante and we're really going to start falling behind in terms of affordability. We're not going to be able to compete for migrants with the other eastern states.''

Queensland has increased the stamp duty exemption for first home buyers from $350,000 to $500,000, in line with NSW and Western Australia.

Ms Kakas said the Government was struggling to give up revenue from stamp duty, which covers the transfer of land titles from one owner to another.

"Really, you're probably looking at about $200 worth of paper work, which is paid for by the two people transferring the land,'' she said. "It's a completely ineffective tax.''

Victorian Premier John Brumby announced a 10% increase to stamp duty thresholds in May and removed a policy loophole, allowing first-home buyers to access both the stamp duty concession and up to $12,000 in government grants.

This means the buyer of a house worth $317,000 would pay $2460 less stamp duty as well as pocketing the government grants.

But Opposition planning spokesman Mathew Guy said increasing house values will eliminate any savings.

"The Government is still going to achieve more stamp duty than ever before, according to the next forward estimates,'' he said.

"We are just asleep at the wheel in trying to maintain our competitive advantage. The Queensland Government is seeking to be as competitive as possible in terms of taxation and yet we've done nothing about it.''