Melbourne stamp duty costs rise faster than house prices | PropTrack

New PropTrack analysis shows stamp duty on a typical Melbourne house has risen almost twice as fast as house prices since 1990.

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The state government’s tax slug on Victorian families buying a typical Melbourne house has risen almost twice as fast as house prices since 1990.

Grim PropTrack analysis shows Melbourne’s $984,000 median house price now comes with a $54,120 stamp duty bill, compared with about $4090 on the city’s $131,500 median-priced house in 1990.

While Melbourne house prices have risen about 7.5 times in that period, the stamp duty bill has surged about 13.2 times.
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Separate suburb-level data shows Victoria is now the most expensive state, dollar for dollar, for the home tax.

Despite this, first-home buyers remain stuck with stamp duty concession thresholds put in place when the current scheme commenced in 2017, capped at $600,000 for those who want to avoid the tax and $750,000 for those who can afford a portion of it in addition to a deposit.

There are now just 38 Melbourne suburbs where they can buy a median-priced house for less than $750,000, and only two, Melton and Melton South, that remain below $600,000.

A Liberal-Nationals election pledge to scrap stamp duty for first-home buyers on homes worth up to $1m would lift the number of Melbourne house markets covered to 122.

David Southwick says Victoria’s first-home buyer stamp duty thresholds are no longer keeping pace with Melbourne house prices. Picture: NewsWire / Valeriu Campan.

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Shadow minister for housing and building David Southwick said young Victorians should be able to own their own home.

“We’ll abolish stamp duty for first home buyers on properties up to $1 million so more young people can achieve the dream of home ownership,” Mr Southwick said.

“Stamp duty reform alone won’t fix Victoria’s housing crisis. Forty three per cent of the cost of building a home is now tax and regulation. We need to cut red tape, reduce taxes, speed up planning approvals and build more homes where people actually want to live.”

First-home buyers Ryan Soule and Diana Yopasa have bought in Reservoir after widening their search from Brunswick. Picture: Wayne Taylor.

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First home buyers Ryan Soule and Diana Yopasa said the pledge would have made a major difference to their property hunt.
The couple, who recently bought in Reservoir after shifting their search from Brunswick, where finding a house within reach had become increasingly difficult, said they were not surprised to hear first-home buyers were being pushed beyond the stamp duty thresholds meant to help them into the market.

“You focus so much on getting the deposit together, but then there is everything else on top,” Ms Yopasa said.

“That money could have gone towards the house, furniture, fixing things or just giving us a bit more breathing room.”

PropTrack economist Anne Flaherty says rising stamp duty costs are changing how Victorians think about buying and selling homes.

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PropTrack economist Anne Flaherty said the rising pain of stamp duty was changing the way people considered homes, with many staying put for longer or making decisions about the property they bought based on the tax bill.

“If you only move in for a few years, the capital growth will not make up for the stamp duty cost you pay,” she said. “A very high share of recent buyers could be selling at a loss, with stamp duty factored in.”

Housing Minister Nick Staikos was contacted for comment.

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david.bonaddio@news.com.au