The Victorian Government has proposed significant changes to its stamp duty legislation as part of its 2023/24 budget.
In Victoria, stamp duty on transactions involving commercial and industrial properties (but not, at least at this stage, rural or residential properties) is set to be replaced by an annual property tax equal to 1% of a property’s unimproved value.
A property will become subject to the new regime when first transferred after 1 July 2024, with the purchaser on that occasion still having to pay stamp duty but having the choice to pay it upfront or in instalments over a 10-year period (plus interest). The first annual taxes will then become payable 10 years after the transaction.
For second and subsequent transactions involving the property after 1 July 2024, no stamp duty will be payable. Instead, the annual tax will apply.
Victoria’s announcement came on the same day the New South Wales Government scrapped its proposed changes to stamp duty for residential properties, which would have given first home buyers the option to pay upfront stamp duty or annual land tax when buying a home valued between $650,000 and $1,200,000.
The Queensland Government says it has no plans to review its transfer duty regime, which has one of the highest top marginal rates in the country at 5.75%.
Author: Phoebe Wright, Lawyer.