First-home buyers are being hit with big tax bills as they push apst Victoria’s stamp duty concession cap.
Thousands of Victorian first-home buyers are being slugged with massive tax bills as the state’s primary support program for them falls short.
It comes as analysis shows Victorian state opposition plans to raise the cap on the first-home buyer stamp duty concession program to $1m would add 204 suburbs to the list where market entrants don’t have to pay stamp duty.
Currently there are fewer than 20 where the median house price falls within the necessary parameters.
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Australian Bureau of Statistics data shows there were 36,756 new first-home buyer loans issued in Victoria in the 2023-2024 financial year.
The ABS stats show a further 1893 home loans were issued to first-home buyers purchasing an investment property in that same year.
However, State Revenue Office data shows that just 32,849 payments were made under the first-home buyer concession scheme that waives stamp duty for purchases for up to $600,000 and provides a discount from there to $750,000.
For a $750,001 home purchase stamp duty totals at $40,070, for a $1m purchase it reaches $55,000.
Yesterday the Victorian opposition announced it would raise the cap to $1m in a move that would bring the state closer to the margins being offered in Queensland and NSW, as well as reflecting a federal government decision to raise the cap on their incoming Help To Buy co-buying scheme.
Their modelling suggests it would help 17,000 people buy a home within a year, however would not be implemented until after at least the next state election in November, 2026 — as the party would have to first win office before it could be rolled out.
7 Prouse Place, Werribee, is one of the few Melbourne houses for sale with a $400,000-$440,000 price below the $600,000 cap on zero stamp duty payments for first-home buyers.
With a $1m cap on when first-home buyers pay stamp duty, they could look at homes like 56a Sherlock Rd, Croydon, which is currently just out of support range at $750,000-$820,000.
PropTrack median house sale data shows there are currently 19 suburbs that fit beneath the $600,000 cap, but 204 would be applicable under the opposition’s revision.
Separate PropTrack sales data show that in the past week there were at least 263 homes sold in the past week would have qualified for the state’s scheme on price, at the opposition’s revised threshold 868 home sales in the past seven days would have.
It would return former first-home buyer hubs to the list of areas available to them without having to pay a hefty tax bill, including Sunshine, Watsonia, Reservoir and Greenvale where the typical home today costs more than $750,000 and is beyond any form of stamp duty support.
Real Estate Institute of Victoria interim chief executive Jacob Caine said with home values widely tipped to rise in the coming year, the state government should make the change immediately rather than waiting for the Liberal party to take it to an election.
“There’s only one reason the government wouldn’t make these changes today and that’s because they want and need the revenue they are taking from first-home buyers for these stamp duty payments,” Mr Caine said.
Houses in once affordable Pakenham are beyond the reach of the current stamp duty waiver scheme, with 63 Sandalwood Drive listed for $790,000-$860,000.
26 Samson Brook Drive, Wallan, could be in reach for stamp duty conscious market entrants, but with a $560,000-$610,000 asking price might still come with some tax payment required.
With research regularly showing stamp duty was an inefficient tax, he said it should not be allowed to continue stopping first-home buyers from purchasing the right home for them near where they work and where their family lives.
He added that with the changes enough to add 185 suburbs to the list covered for stamp duty waivers, it would also likely slow any home price growth caused by the tax tweak.
Mortgage Choice loan broker David Thurmond said the state’s program needed to be reviewed, as it hadn’t been updated since 2017 and there would “definitely” be thousands buying homes outside of the current caps.
“And what has happened since? A tremendous increase to values,” Mr Thurmond said.
“It is forcing people to make compromises on the suburbs they are living in and it’s meaning they have to buy a second home later on, as they grow out of their first.
“There are definitely people who could go to $800,000 if the stamp duty was removed.”
Even a 287sq m property with a three-bedroom house at 1 Coquille Way, Armstrong Creek, near Geelong would be likely to incur a stamp duty payment for first-home buyers given its $$585,000-$615,000 asking price.
46 Fifth Ave, Altona North, is listed for $900,000-$990,000. A sum that would engender a $50,000-plus stamp duty payment for a first-home buyer today.
The broker said while it was likely home values would rise in response to first-home buyers effectively getting a boost to their budgets, the addition of so many more suburbs to the potential buying pool would likely diffuse the impact — and the support was needed right now.
By contrast, he said that none of his clients would benefit from the Allan government’s stamp duty concessions for off-the-plan purchases for up to $1m.
To generate more housing, Mr Thurmond said additional targeted grants at new homes would also be necessary.
SUBURBS WITH HOUSES UP TO $1M
Melton – $475,000
Melton South – $522,000
Kurunjang – $538,000
Melton West – $540,000
Brookfield – $550,000
Dallas – $560,000
Coolaroo – $560,000
Weir Views – $570,000
Harkness – $572,000
Wyndham Vale – $575,000
Thornhill Park – $580,500
Broadmeadows – $585,000
Laverton – $590,000
East Warburton – $590,000
Longwarry – $595,000
Millgrove – $597,500
Bacchus Marsh – $599,500
Doveton – $600,000
Meadow Heights – $600,000
Frankston North – $605,000
Werribee – $606,000
Jacana – $608,500
Maddingley – $610,000
Albanvale – $612,000
Kings Park – $618,000
Wallan – $620,000
Hoppers Crossing – $620,000
Campbellfield – $621,000
Cobblebank – $625,000
Strathtulloh – $625,000
Rockbank – $625,000
Mambourin – $626,500
Diggers Rest – $635,000
Eumemmerring – $635,000
Kalkallo – $640,000
Manor Lakes – $640,000
Badger Creek – $640,000
Deanside – $642,000
Mount Cottrell – $642,000
Darley – $649,500
Donnybrook – $650,000
Tarneit – $650,000
Craigieburn – $650,000
Pakenham – $652,000
Delahey – $652,500
Werribee South – $652,500
Roxburgh Park – $653,000
Truganina – $655,000
Beveridge – $656,500
Cranbourne – $658,500
Westmeadows – $660,000
Warburton – $660,000
St Albans – $662,500
Epping – $663,000
Hampton Park – $665,000
Junction Village – $665,000
Deer Park – $669,000
Mickleham – $669,900
Koo Wee Rup – $670,000
Hastings – $670,000
Sunbury – $675,000
Ardeer – $676,300
Wollert – $680,000
Bonnie Brook – $680,000
Cranbourne West – $683,000
Sunshine West – $685,000
Woori Yallock – $694,000
Clyde – $695,000
Fraser Rise – $697,500
Mernda – $700,000
Kealba – $700,000
Lalor – $701,000
Sydenham – $701,000
Capel Sound – $705,000
Yarra Junction – $707,500
Cranbourne East – $710,000
Lang Lang – $710,000
Carrum Downs – $711,000
Whittlesea – $715,000
Altona Meadows – $716,000
Cranbourne North – $717,000
Lancefield – $717,500
Officer – $720,000
Thomastown – $720,000
Blind Bight – $722,500
Aintree – $723,750
Clyde North – $725,000
Dandenong – $725,000
Crib Point – $727,500
Hallam – $728,000
Seville East – $729,500
South Morang – $730,000
Baxter – $730,000
Bunyip – $732,500
Gladstone Park – $733,000
Burnside Heights – $735,000
Frankston – $735,000
Sunshine North – $736,000
Braybrook – $740,000
Albion – $740,000
Launching Place – $742,500
Caroline Springs – $743,500
Garfield – $745,000
Tullamarine – $745,000
Narre Warren – $748,750
Point Cook – $750,000
Eynesbury – $750,000
Nar Nar Goon North – $750,000
Seabrook – $752,500
Doreen – $760,000
Dandenong North – $760,000
Rosebud – $760,000
Keilor Downs – $765,000
Fawkner – $766,500
Noble Park – $770,000
Noble Park North – $777,500
Brooklyn – $780,000
Sunshine – $782,500
Lynbrook – $783,000
Skye – $787,000
Burnside – $788,000
Williams Landing – $792,000
Kilsyth – $795,000
Kingsbury – $797,500
Mill Park – $798,000
Heidelberg West – $800,000
Romsey – $800,000
New Gisborne – $800,000
Keilor Park – $800,000
Hillside – $801,000
Endeavour Hills – $805,000
Mooroolbark – $812,000
Glenroy – $815,000
Narre Warren South – $815,000
Attwood – $815,000
Officer South – $820,000
Lilydale – $820,000
Seaford – $820,000
Healesville – $820,000
Maidstone – $821,000
Cranbourne South – $821,500
Coldstream – $822,500
Selby – $824,750
Silvan – $825,000
Belgrave – $827,500
Springvale – $830,000
Kalorama – $835,000
Mount Evelyn – $838,000
Springvale South – $838,000
Monbulk – $838,000
Tyabb – $840,000
Hadfield – $850,000
Seville – $850,000
Bundoora – $850,000
Chirnside Park – $850,000
Boronia – $850,000
Tootgarook – $850,500
Langwarrin – $855,000
Heathcote Junction – $855,000
Greenvale – $857,500
Tecoma – $860,000
Somerville – $863,750
Taylors Hill – $865,000
Mount Dandenong – $865,000
Upper Ferntree Gully – $866,500
Cairnlea – $870,000
Cockatoo – $870,000
Ferntree Gully – $870,000
The Basin – $873,000
Upwey – $875,000
Kallista – $875,500
Heidelberg Heights – $875,750
Wesburn – $876,250
Bayswater – $879,000
Berwick – $880,000
Cannons Creek – $887,500
Croydon – $888,000
Carrum – $888,500
Reservoir – $890,000
Botanic Ridge – $895,000
Bayswater North – $897,500
Croydon South – $897,500
Avonsleigh – $900,000
Gowanbrae – $905,000
Watsonia North – $905,000
Williamstown North – $905,000
Keysborough – $910,000
West Footscray – $915,000
Airport West – $917,500
Montrose – $920,000
Altona North – $925,000
Wandong – $925,000
Knoxfield – $930,444
Lyndhurst – $931,500
Wattle Glen – $935,000
Sassafras – $935,000
Yarra Glen – $937,500
Clayton South – $938,500
Kinglake West – $938,500
Chelsea Heights – $940,000
Watsonia – $940,500
Kinglake – $945,000
Taylors Lakes – $945,000
Pearcedale – $947,500
Dromana – $949,000
Footscray – $950,000
Chelsea – $950,000
Riddells Creek – $950,000
Rye – $950,000
Wandin North – $955,000
Scoresby – $961,000
Coburg North – $969,250
Keilor Lodge – $970,000
Emerald – $973,000
Gisborne – $980,000
Avondale Heights – $980,000
Croydon North – $987,000
Hurstbridge – $990,000
Ringwood East – $991,000
Beaconsfield – $1,000,000
Gembrook – $1,000,000
Nyora – $1,000,000
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