Stamp Duty Promises In Victorian Election Campaign

by Mary Swire, Tax-News.com, Hong Kong

22 November 2010

The present Labor government in Victoria, Australia, and its opposition, the Coalition led by the Liberal party, have clashed on their respective stamp duty promises in the campaign for the state elections to be held on November 27.

The current Premier John Brumby announced that a re-elected Labor state government would abolish stamp duty on newly-built first homes in rural and regional Victoria from March 1, 2011, at a cost of AUD115m (USD113m) over four years; and continue the First Home Owner’s scheme for the next financial year, at a cost of almost AUD139m. In addition, it would raise the concession threshold on stamp duty for pensioners to AUD750,000, to help older Victorians who want to downsize.

On the other hand, the Coalition leader Ted Baillieu announced that, while continuing the First Home Owner’s scheme, a Victorian Coalition government would also slash stamp duty for eligible first home buyers by 50%; phased in over the first term of a Baillieu government, starting with a 20% cut from July 1 next year. First home buyers will be eligible for the stamp duty cut for homes valued at up to AUD600,000.

The Coalition has said that Victorians pay the highest levels of stamp duty in Australia on family homes. Meanwhile, “housing affordability been has seriously eroded after 11 years of Labor,” Baillieu disclosed. “Victorian housing is now amongst the most unaffordable in the nation and thousands of Victorians can no longer afford to even contemplate buying their first home.”

However, the Coalition’s first home-buyer stamp duty package represents AUD750m of tax cuts, and this has been attacked by the Labor party as unaffordable. They called on Baillieu to immediately submit his policies for costing by the Victorian Treasury because they now posed a significant risk to the state’s budget and economy.

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