For many Victorians, buying a home is becoming impossible. Rising house prices, high interest rates and increasing taxes are making home ownership harder every year. One of the biggest barriers is stamp duty in Victoria, which Libertarians argue is one of the most damaging taxes imposed by the Victorian government.
Whether you are a first home buyer, a family upgrading or someone downsizing in retirement, stamp duty in Victoria adds tens of thousands of dollars to the cost of buying property.
The Libertarian Party believes this tax should be abolished over time to make housing more affordable and reduce the burden on Victorians. The party’s taxation policy specifically calls for eliminating stamp duty over ten years as part of a broader plan to make Victoria the lowest-taxed state in Australia.
How Much Is Stamp Duty in Victoria?
Many people asking, “How much is stamp duty in Victoria?” are shocked by the answer.
Stamp duty, also known as Land Transfer Duty or transfer duty, is calculated on the dutiable value or market value of a property. The higher the property value, the higher the stamp duty amount.
This tax applies to most:
- residential homes
- investment properties
- commercial property
- vacant land
- some off-the-plan properties.
The tax is collected by the State Revenue Office after a property transaction or land transfer takes place. In most cases, buyers must pay within 30 days of settlement.
There are some exemptions and concessions, including support for some First Home Buyer purchases and certain off-the-plan buyers. However, many Victorians still face enormous tax bills.
Stamp Duty Punishes Home Ownership
In 2023, Victorian Libertarian leader David Limbrick strongly criticised the tax burden created by stamp duty:
Stamp duties are a massive hurdle for people who want to get into the housing market. Someone buying a house in Melbourne at the median price of $746,000 will pay nearly $40,000 in stamp duty, and every time they raise a bid, the stamp duty also goes up. The mortgage payments that are inflated by these taxes over many years cannot be spent on other things, like clothes, newer and safer cars, children’s education or charity.[i]
Libertarians argue that this tax hurts ordinary Victorians, especially young families trying to save for a deposit while also managing a home loan.
The tax also discourages people from moving to homes better suited to their needs. Older couples often remain in larger homes because moving would trigger another large tax bill.
A Tax That Damages the Economy
According to the Libertarian Party policy, stamp duty is one of the most harmful taxes because it increases the cost of buying and selling real estate and discourages property movement.
David Limbrick argues the economic damage goes far beyond housing affordability.
The Federal Treasury has estimated that every dollar of stamp duty revenue raised by governments does 72 cents of harm to the economy. It not only reduces affordability but also distorts the market, dampens construction and keeps people in empty big houses commuting long distances rather than living in more appropriate dwellings. Increasingly it is only the rich that can afford a house with all the taxes that go with it.[ii]
Libertarians say these taxes distort the property market and make it harder for people to build wealth through home ownership.
The Libertarian Solution
The Libertarian Party wants Victoria to gradually abolish stamp duty while reducing wasteful government spending. The party argues this can be achieved responsibly by reducing bureaucracy, cancelling projects such as the Suburban Rail Loop and cutting unnecessary spending.
The party also opposes the constant expansion of taxes such as land tax, which many Victorians now face in addition to stamp duty.
Libertarians believe people should keep more of their own money and have greater freedom when buying and selling property.
Reducing Victorian stamp duty would:
- improve housing affordability
- encourage property movement
- support construction
- help first home buyers
- reduce the cost of living.
The Libertarian message is simple: Victorians should not be punished with massive taxes simply for wanting a home of their own.
[i] https://www.parliament.vic.gov.au/parliamentary-activity/hansard/hansard-details/HANSARD-974425065-20234
[ii] https://www.parliament.vic.gov.au/parliamentary-activity/hansard/hansard-details/HANSARD-974425065-20234