Victorian businesses will be spared from paying stamp duty but the treasurer concedes more tax reform is needed to make the state an attractive place to set up shop.
The government on Wednesday introduced the Commercial and Industrial Property Tax Reform Bill to parliament.
The bill will abolish stamp duty paid when buying a commercial and industrial properties, replacing it with an annual property tax of one per cent of the property's unimproved land value.
The measure was unveiled in the 2023/24 budget and will apply to all commercial and industrial properties sold from July.
The first buyer will be able to choose to either pay the property's final stamp duty up front or make annual payments over 10 years equal to stamp duty and interest.
Stamp duty, the state tax paid when buying a property, will remain unchanged for residential real estate.
Treasurer Tim Pallas says the change will create thousands of jobs and generate about $50 billion worth of economic stimulus over the next 40 years.
"There are about 265,000 businesses that pay commercial and industrial stamp duty. This will give them options," he told reporters.
Australian Bureau of Statistics data shows the number of businesses in Victoria decreased by 7606 in 2022/23, the only state or territory to record a fall.
Mr Pallas denied businesses were fleeing the state because of rising taxes but said the state couldn't take anything for granted.
"We have to keep looking to reform and refine the offering to business to make us an attractive jurisdiction," he said.
Victorian Chamber of Commerce and Industry chief executive Paul Guerra said the change was designed to provide another path for businesses to remain in Victoria.
"If you want to grow in Victoria, you now can without the impost of stamp duty," he said.
Mr Pallas will hand down his 10th Victorian budget on May 7.
