The Victorian Farmers Federation says its disappointed a Victorian parliamentary inquiry into stamp duty recommended the state should introduce a new broad based land tax.
President Emma Germano said farmers wanted to see stamp duty reform, but did not support any new taxes on farmland.
"The VFF acknowledges the need for tax reform and has been a staunch advocate for the abolition of stamp duty," Ms Germano said.
"Removing this outdated tax is needed to support economic development and to especially help young farmers seeking to buy their first property."
The VFF had consistently said the replacement should not come in the form of a broad-based land tax that could apply to primary production land.
"We know land taxes have a disproportionate impact on farm businesses," she said..
"This point was backed up by the Victorian Treasury in its evidence to the inquiry."
Ms Germano said she was pleased the VFF's evidence about introducing a land tax was contained in the report.
"This is an important warning to government over the negative consequences that would come from a new tax on farms," she said.
Ms Germano said the VFF's alternative plan that would see stamp duty replaced through changes to federal taxation received support from the inquiry.
"This approach aligns with our vision of a fairer and more sustainable tax system that doesn't jeopardise the future of Victorian agriculture," she said.
Ms Germano also said the VFF was disappointed the inquiry failed to engage with the impact of stamp duty on young farmers.
"Instead, the report focusses on concessions for first home buyers and doesn't look at the effects of stamp duty on the economy holistically," she said.
"We call on the Victorian Parliament to carefully consider the potential consequences of implementing a broad-based land tax on primary production land and to explore alternative avenues for stamp duty reform."
The committee called on the state government to urgently explore state based options to reform stamp duty, including abolishing it and implementing a broad based land tax.
The Legislative Council Economy and Infrastructure Committee tabled the final report of its inquiry into land transfer duty fees in the Upper House.
"We heard throughout this inquiry that stamp duty is inefficient, unpredictable and inequitable," committee chair Northern Victoria Animal Justice Party MP Georgie Purcell said.
"Unfortunately, it also represents a significant percentage of the government's budget, so it's difficult to eliminate without impacting current service delivery.
"There are alternative models that we'd like to see the government explore further."
The committee made 12 findings and three recommendations, including that the government address the issue of bracket creep, which has increased the cost of stamp duty well beyond what was originally intended.
It also recommended Victoria considered taking additional measures to increase housing supply, including strengthening housing targets.
The report found that national reform of stamp duty would better address its negative impact on housing affordability, economic mobility, and market efficiency, for more Australians.
"Implementing comprehensive and uniform reforms is an opportunity to promote housing accessibility and affordability, stimulate economic growth, and create a fairer and more efficient housing market for all Australians," the report found.
The report is available on the committee's website.
