Under this proposal the Commonwealth Government would provide concessional loans to state and territory governments, excluding the Australian Capital Territory (ACT), to facilitate the replacement of the existing stamp duty on sales of residential and non‐residential properties with a broad‐based land tax.

From 1 July 2023, property acquisitions would not be liable for stamp duty, but would instead be liable for an ongoing land tax.

The Commonwealth would lend to state and territory governments any shortfall between the expected stamp duty and land tax revenue for each financial year.  These loans would be made in advance.  Interest rates on the loans from the Commonwealth Government to state and territory governments would be set at half of the Commonwealth’s borrowing cost.  State and territory governments would transfer any surplus land tax revenue to the Commonwealth Government until the loans are fully paid off.   

The land tax rates would be set by state and territory governments at a level that would allow them to fully repay the loans from the Commonwealth Government by 30 June 2036.

Land tax would not apply to land owned by local, state or Commonwealth governments, pastoral leases, or native title or freehold title held by Aboriginal Land Councils.