ELDERLY Victorians may be taxed thousands of dollars when they enter retirement villages under a proposed new stamp duty law, Treasurer John Lenders has admitted.

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Aged and Community Care Victoria, which represents retirement villages and nursing homes, says the proposed law could cost thousands of retirees up to $25,000.
The legislation was designed to close a loophole that allows large companies to avoid stamp duty by leasing property rather than selling it.
But the Government is now considering changes after discovering the crackdown might also snare retirement village leases.
In a letter to the Law Institute of Victoria last week, Mr Lenders noted the institute’s concerns about retirement villages.
“The proposed amendments may apply to some of these leases,” he wrote.
“The Government is meeting with relevant stakeholder groups representing retirement village residents to discuss different options.”
ACCV chief executive Gerard Mansour said his organisation told the Government of its concerns at a recent meeting.
“In future years it’s everybody entering low care and paying a bond, so it’s thousands of people,” he said.
“The average bond is $200,000, so it’s $10,000 (in stamp duty).
“Some bonds are as high as $500,000. At the upper end it could go as high as $25,000.”
Mr Mansour said he expected the Government would change the Duties Amendment Bill, due to be considered by Parliament next month.
“We don’t think they were intending to catch us,” he said.
“We would be extremely surprised if they were to proceed – this is a terrible outcome for both the industry and residents.
“We’re very hopeful of a positive outcome.”
Mr Mansour said there were about 50,000 people in residential care in Victoria, about 22,500 of whom paid a bond.
The Law Institute opposes the crackdown on stamp duty and wants the Bill scrapped.
“If they do want to reform this area there should be a proper consultative process,” president Danny Barlow said.
A spokesman for Mr Lenders said the Bill would be amended if shown to have “unexpected consequences that are not able to be overcome administratively”.


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