Stamp duty exemption plan reheated for first homebuyers

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Stamp duty exemption plan reheated for first homebuyers

Stamp duty would be scrapped for first homebuyers spending up to $1 million under a state election pitch that creates a $1 billion budget shortfall.

In his budget reply speech, Victorian shadow treasurer James Newbury unveiled a policy to lift the stamp duty exemption for first homebuyers to $1 million with “no conditions, no catches”.

First homebuyers in the state are only exempt from paying stamp duty on properties valued $600,000 or less and receive a concession on purchases between $600,001 and $750,000.

Those thresholds have remained unchanged since 2017.

A first homebuyer purchasing a $1 million Victorian home would save $55,000 under the change, a centrepiece of Mr Newbury’s “Go for Growth” plan that echoed a slogan from John Howard’s failed 2007 election campaign.

Crucially, they would have to pay the full stamp duty amount if the price rises above the threshold by a dollar.

The policy, which applies to all new and established homes and off-the-plan builds, hinges on the coalition winning the next state election in November 2026.

Mr Newbury said the move would deliver about 17,000 exemptions in its first year and cost $1.09 billion over four years.

He refused to release the parliamentary budget office’s cost modelling of the policy or explain where the coalition would find the money to pay for it until closer to the election.

“If we were to give you the costing on one policy, it would foreshadow the other commitments we’re going to make,” Mr Newbury told reporters.

It is the fifth tax change the state coalition has committed to after vowing to repeal the schools payroll tax, GP tax, short-stay levy and expanded fire services levy.

The coalition took the same stamp duty policy to the 2022 state election.

It has not raised the $1 million threshold to account for rising house prices over the past two and a half years.

“It’s absolutely long overdue that they are elevated,” Property Council of Australia’s Victorian executive director Cath Evans said.

The Victorian budget on May 20 extended the stamp duty exemption for all buyers of off-the-plan developments to October 2026 at a cost of $61 million.

There were no other tax concessions to help first homebuyers crack into the market, although the state Labor government is overhauling planning rules to build more higher density housing and townhouses.

Speaking at a Property Council breakfast, Treasurer Jaclyn Symes was skeptical of the opposition’s counter offer.

“When you create a policy that has a financial impact, the obviously question is what services, what hospitals will suffer as a consequence,” she said.

Stamp duty was forecast to rake in $9.2 billion in revenue for Victoria this financial year.

In 2023, NSW repealed an option for first homebuyers to pay an annual land tax instead of stamp duty on homes valued up to $1.5 million.

It was replaced with a scheme that raised stamp duty exemptions from $650,000 to $800,000 and concessions from $800,000 to $1 million.

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