Victorian Government to reap lower stamp duties

Victorian stamp duty revenue is expected to drop by 6.4 per cent in 2016-17 after significant growth in revenue over the past few years, according to the Victorian Budget papers.

Land transfer duty will fall to $5.7 billion in the coming financial year after revenue growth of 23 per cent in 2015-16.

But Victoria’s land tax revenue is forecast to grow by 28 per cent to $2.2 billion in 2016-17, but average 2.5 per cent a year over the forward estimates.

“The boom in Victoria’s property market over the past few years has been driven by a strengthening labour market, historically low interest rates, increased investor demand and strong population growth,” the Victorian Budget paper states.

The government confirmed it will more than double the stamp duty surcharge on foreign residential property buyers, from 3 to 7 per cent on the purchase price.

The surcharge will apply to contracts inked from July 2016, and is expected to generate $53 million in revenue over 2016-17 and $321 million over the forward estimates.

The absentee landowner surcharge will also triple from 0.5 to 1.5 percent from next year. This initiative is expected to generate $28 million over 2016-17, and $84 million over the forward estimates.

The State Revenue Office will receive additional funding to establish and expand compliance programs involving the land tax principal place of residence exemption, foreigner purchaser additional duty, and absentee owner surcharge.