Would scrapping stamp duty help more Victorians buy their first home?

Updated 3 November 2026 with the latest figures.

On 26 May 2025, Victoria's Liberals and Nationals promised that first home buyers would pay no stamp duty on homes worth up to $1 million. Liberal Victoria The Coalition put the cost at $1.09 billion over four years, with about 17,000 exemptions in the first year. AAP

On a $1 million home, the saving is up to $55,000. With the state election on 28 November 2026, the promise sits at the centre of the opposition's housing pitch. Wakelin

The stakes are big on both sides of the ledger. Stamp duty, the one-off tax paid when you buy a property, will raise about $10 billion for Victoria in 2026-27. CA ANZ That is close to a quarter of the state's $43.2 billion in taxes, on our maths.

On 20 October the ABC reported research arguing that scrapping stamp duty could lift home ownership. ABC So does a first-buyer exemption create new owners, or just cheaper ones?

A bigger exemption would save first home buyers real money, but it would add very few owners. The evidence for more home ownership comes from abolishing stamp duty for everyone and replacing it with a yearly land tax.

Confidence: Likely. Three parts to this: the buyers, the movers and the budget.

Victoria already charges first home buyers no duty up to $600,000, with a discount up to $750,000. Those thresholds have not changed since July 2017. SRO Victoria

The median Melbourne unit was worth $624,740 at the end of September, according to Cotality. Many first buyers of units already pay little or nothing.

Prices are also falling. National home values dropped 1.2% in October, the seventh monthly fall in a row, and Melbourne's median dwelling sat at $773,027. ABC As prices slide, more homes drop under the existing thresholds.

The closest test case is New South Wales. In 2023 Labor raised its full exemption from $650,000 to $800,000. The NSW Parliamentary Budget Office costed that at $169 million over four years and forecast first home buyer numbers would rise by just 0.6%. NSW PBO

That works out to about 913 extra buyers across four years, on our maths. Each one cost roughly $185,000 in forgone revenue, because everyone else who qualified got the discount too. The movers are where the evidence gets stronger.

Economists dislike stamp duty because it punishes moving. An e61 Institute study found that a one percentage point rise in the tax cut home purchases by 7.2%. e61

Its natural experiment was Queensland's 2011 duty rise, which hit owner-occupiers but left first home buyers exempt. e61 via APO

Older research points the same way. Andrew Leigh, then at the Australian National University, found in a 2013 paper with a co-author that a 10% higher duty cut housing turnover by 6% over three years. IZA Britain's 2008-09 stamp duty holiday lifted monthly sales in the targeted price band by about 20%, according to Michael Carlos Best and Henrik Kleven. Microeconomic Insights

Reserve Bank governor Michele Bullock called the tax "a barrier for dynamism in the economy" in October 2025. AAP Her point is the empty nester who stays in a four-bedroom house because selling costs tens of thousands. That is a case for cutting duty for all buyers, and the Coalition plan only covers first homes.

Replacing $10 billion a year is hard, so governments nibble. The ACT is the only place swapping stamp duty for land tax, a gradual phase-out it began in 2012.

From 1 July 2026 it charges no duty to any first home buyer, at a first-year cost of about $17 million. ACT Government

New South Wales tried an opt-in yearly land tax for first buyers in late 2022. About 1,200 people a month took it up before Premier Chris Minns scrapped it in July 2023. The New Daily

In Victoria, Labor plans no major stamp duty changes and would keep today's first-buyer thresholds.

The Greens would abolish duty for all owner-occupiers up to $1.1 million, funded by a land tax on large investors. Labor and the Coalition both promise to lift the land tax threshold back to $300,000, over six and five years respectively. Wakelin That shrinks the tax economists would use to replace duty.

The Property Council's Victorian executive director, Cath Evans, called stamp duty "the worst property tax of the lot" in May 2025. Real Estate Business Her case is that saving a deposit is the binding hurdle, and duty adds tens of thousands to it.

Take $40,000 off a $750,000 purchase and a young couple might buy a year or two sooner. Best and Kleven's UK work backs part of this: when buyers are short of cash, cutting transaction taxes moves more sales than economists expected.

That gets a lot right, and getting in sooner is a real gain for the household. But earlier buying is not the same as more owners, and the NSW costing shows how small the lasting effect was. Some of the saving can also leak into prices, as Lorcan Sirr of Technological University Dublin warned about a similar Irish plan. Irish Times

Nobody has published a Victorian estimate of how many extra owners the $1 million exemption would create, only how many exemptions it would grant. As of 2 November, the Coalition's full election costings were still to come. Sue Barrett This verdict assumes Victorian buyers respond much as New South Wales buyers did in 2023.

Scrapping stamp duty for first home buyers would make buying cheaper for about 17,000 Victorians a year, but it would barely change how many become owners. Confidence: Likely. First home buyers spending $600,000 to $1 million win, while the state budget loses about $1 billion over four years on the Coalition's own figures.

We drew on 23 sources: five primary documents and data sets (Victorian SRO, NSW Parliamentary Budget Office, ACT Government, Cotality, Victoria's 2026-27 budget figures via CA ANZ), four research outputs (two from e61, one IZA paper, one summary of a peer-reviewed UK study), and news and analysis from the ABC, AAP, Wakelin, Mortgage Professional Australia, The Irish Times and others. This piece was first written on 20 October 2026 and refreshed on 3 November 2026 with October price data and the parties' latest positions. An earlier version said Victoria's Parliamentary Budget Office expected 17,000 claims; AAP reports that figure as the Coalition's, with the PBO modelling unreleased. We could not open the original NSW Treasury home ownership modelling cited by the ABC, so it is left out. On our maths: 913 extra buyers is the gap between the NSW PBO's forecast totals (144,612 with the policy, 143,699 without); $185,000 is $169 million divided by 913; 23% is $10 billion of $43.2 billion. Researched with AI tools; checked and edited by VOID.

Victoria's Coalition wants first home buyers to pay no stamp duty on homes up to $1 million, saving some of them up to $55,000. When New South Wales did something similar in 2023, its own budget office expected first home buyer numbers to rise by less than 1%, so most of the money went to people buying anyway. Economists think scrapping stamp duty for everyone would get more people moving and buying, but that means a yearly land tax, and Labor and the Coalition are both cutting land tax instead.