The Grattan Institute is leading a charge by a dozen economists who say Victoria’s heavy reliance on stamp duty costs the economy up to $5 billion a year.
Victoria has one of the least efficient tax systems in the country and for far too long has relied on what economists warn are economically destructive taxes that must be radically overhauled in this month’s state budget.
“Stamp duty is a really unfair tax because it punishes those who are often younger and looking to buy their first home, and it stops people from moving to a better job,” Coates said. The independent think tank said stamp duty penalised younger people who tend to be more mobile, and described it as a defacto tax on divorce. Coates found stamp duty was a big reason why more than half of divorced women, who lose their home when the assets are split, do not buy again.and will investigate its impact on housing supply, labour mobility and the overall efficiency of the tax system.
For much of the past decade, stamp duty has made up more than half of the state’s tax revenue. But experts say it is volatile, with the Grattan Institute describing it as an “economically destructive tax” that Victoria has historically relied too heavily on.