Victorian opposition to scrap stamp duty for first homebuyers if elected next year
The Victorian opposition says it will scrap stamp duty for first homebuyers if it forms government next year — a move one expert says could push up house prices while helping more Victorians into homes.
The proposal to wipe stamp duty for all first home purchases of up to $1 million would benefit an expected 17,000 home buyers a year.
But the Victorian Liberals declined to detail how they would pay for the proposal, which it said would cost $1.09 billion over the next four-year term of government.
Asked how the debt-saddled state could afford the hit, Shadow Treasurer James Newbury flagged a "different set of priorities" if his team was elected in 2026, including getting more people into homes.
"We will make every announcement fully costed and released before the election," he said.
"There is obviously a difficulty with breaking down a cost prior to doing that, because if we were to give you the costing on one policy, it would foreshadow the other commitments we are going to make."
The proposal was the centrepiece of a budget reply speech, delivered on Tuesday, that took aim at the state's tax burden under the Allan Labor government.
Treasurer Jaclyn Symes revealed in her first budget last week that the state's debt is set to hit record levels, with net debt expected to reach $167.6 billion this year, before growing to $194 billion in three years' time.
However, the budget also includes a $600 million surplus, in part due to the controversial Emergency Services and Volunteers Fund, which will tip $1.6 billion into government coffers in the coming financial year.
"We know that one of the cohorts that's missed out a lot is that next generation who want to come through into home ownership," Opposition Leader Brad Battin said on Tuesday.
"This is a policy that will be a game-changer.
The opposition leader said developers and industry figures he spoke with backed the move, saying it would boost supply and confidence in the sector.
But Michael Fotheringham, from research body the Australian Housing and Urban Research Institute, warned there was a risk it could inflate house prices by increasing the amount home buyers could borrow and spend.
"There's a risk that that's inflationary, but as a policy overall, this approach has been quite successful," he said.
He said the policy merely lifted the threshold of an existing scheme, which allows for a full stamp duty exemption on properties of up to $600,000 and a concession for properties up to $750,000.
"The people that will benefit from [the new policy] are first home buyers that are looking for a more premium home rather than a more modest home, so looking to be a bit more upscale in the market," he said.
The construction sector says interest rates, reduced borrowing capacity and construction costs have hampered the feasibility of some residential developments.
Dr Fotheringham said a successful policy would strike a balance between making development more feasible without inflating prices.
The Labor government recently extended a stamp duty concession for apartments, units and townhouses bought off-the-plan.
The policy has been criticised by some who argue it does more to help existing home owners downsize rather than it does to help young people into the market.
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