The Victorian State Government is setting its sights on budget repair, and will abolish stamp duty for commercial and industrial properties in a move they say will grow the economy to the tune of $50 billion.
The changes will see stamp duty replaced by an annual property tax that will be calculated at one per cent of the site’s unimproved land value.
Lobby groups have been calling for the abolition of stamp duty on commercial property for years and will no doubt be thrilled with the move towards a broadbased tax.
To allow the new system to transition in, first purchasers of a property in the new financial year of 2024 can either pay stamp duty or the equivalent amount over 10 years.
New properties entering the system after this time will never again attract stamp duty and the only the annual property tax will apply.
The rules will not apply to current owners of commercial or industrial properties purchased prior to July 1, 2024.
Victorian Chamber of Commerce and Industry chief Paul Guerra was one industry group head welcoming the move.
“The Victorian Chamber has been working with the State Government on this landmark and generational productivity reform which businesses across Victoria will welcome,” he told the Herald Sun.
“This is exactly the type of progressive tax reform that is required to free up stamp duty charges which will accelerate building upgrades, stimulate investment in commercial property and free up more capital.”
The State’s Treasurer Tim Pallas told the Herald Sun the changes were good for business and jobs.
“We’re removing barriers to larger investments, accelerating business growth and helping our economy grow even stronger,” he said.
“Business and industry have told us they want this reform and we’ve listened.”
The State Government will continue its consultation with business and industry groups over the coming months and will release the final form of the transition by the end of the year.
Premier Dan Andrews last week ruled out the idea of abolishing stamp duty for residential properties as well.