Downsizer tax break not ruled out under housing reform

It would alleviate housing shortages and support older owners to move into more suitable accommodation, the council said in a submission to Plan for Victoria, the government's strategy to accommodate growth.

The council's Victorian executive director Cath Evans said older home owners find it hard to overcome the stamp duty "barrier" when downsizing.

"A focus on housing supply should not only incorporate the construction of new homes but the more efficient transaction of existing homes," she said.

"This will promote a more efficient housing market by aligning the interests of older homeowners with the needs of prospective first homebuyers."

Ms Allan left the door open to the change as she revealed the government is preparing to unveil key policy changes to boost housing stock, on top of its plan to build 800,000 new homes under its Housing Statement.

"We're having a lot of discussions with the property council and other industry representatives about what more we can do," Ms Allan told reporters in Hawthorn on Thursday.

"We are looking at building on the (housing) reforms we have in place, that does include conversations with industry about how we continue to partner with them to build more homes."

Earlier in 2024, the government sent its strongest signals yet it is open to stamp duty reform including the introduction of a broad-based land tax, despite Treasurer Tim Pallas warning scrapping the tax could leave a $30 billion hole in the budget.

Victorian Opposition Leader John Pesutto said there was no one single solution that would solve the state's housing crisis.

"We're certainly looking at options for people who want to downsize," Mr Pesutto said.

The council is also pushing for strata property laws to be overhauled so buildings can be sold with the backing of 75 per cent of owners, bringing Victoria into line with NSW and Queensland.

Ms Evans said it could unlock some 100,000 new homes within 15 minutes of the city centre, particularly impacting badly designed or inaccessible buildings from the late twentieth century.