Economist Saul Eslake says the Victorian government is looking to increase the “worst tax” in its armoury by raising stamp duty on properties valued over $2 million.
Victoria aims to raise nearly $3 billion over the next four years by raising the amount of tax paid when buying a property worth more than $2 million from around $121,000 in stamp duty to $123,000.
“I’m not criticising the government for wanting to raise additional revenue, that’s understandable given the financial position which is before them, but I they’re choosing to do it in a very bad way,” he said.
“Increasing land tax is ok, although it would be better if they reformed the land tax system rather than simply raising some of the rates, but stamp duty is a very bad tax.
“Indeed, economists since Adam Smith invented the subject in 1776 have been saying that land tax is the best, or depending on your perspective, the least worst of any tax that governments have ever invented.
“But stamp duty has equally commonly been identified as the worst tax of any type that’s levied by any government - federal, state or local in Australia - and unfortunately what the Victorian government’s proposing to do is to increase the worst tax in its armoury”.
