Stamp Duty Bracket Creep

Date: 21 Aug 19

Stamp duty bracket creep is once again in the spotlight as the REIV repeated its continued calls for the Victorian Government to review the rates and thresholds for property taxes.

In 2008/09, just 6.6 per cent of Melbourne houses had a median house price of more than $960,000, today that figure is 28.4 per cent, but the stamp duty brackets have not changed to reflect this.

The median house price in 2008/09 was $428,000 and now, in 2018/19 it is almost double that at $810,000. As such the top level of land tax is being paid on a lot more properties by a lot more people.

The REIV’s position and supporting data was splashed across the front page of Monday’s Herald Sun and the story was subsequently picked up by television and radio outlets.

Interviews with REIV Immediate Past President Richard Simpson featured on the ABC radio news at 9am and 10am. Channel 9’s Brett McLeod also interviewed Richard live on air during Channel 9’s 4pm news. Richard’s commentary and REIV data was broadcast on Channel 9’s 6pm news, ABC TV’s 7pm news and the 6pm bulletins for Southern Cross TV Ballarat, Bendigo, Gippsland and Geelong.

On Tuesday, 20 August, the Herald Sun continued the campaign, with an editorial supporting the REIV’s position. The editorial stated: “The rates need to reflect today’s property market, not that of 2008. Homebuyers are struggling to find enough money for a deposit, the stamp duty being the sting in the tail in the biggest purchase of the average person’s life.”

The ‘stamp duty slug’ story reached a cumulative audience of more than 1.4 million people across the various media channels which equates to an advertising equivalent spend of more than $125,000.

A decade ago, a million dollars was what you would expect to pay for the premium, top end of the property market – Toorak and Brighton mansions – but today, million-dollar price tags are becoming the norm throughout Melbourne suburbs.

We know that the property industry accounts for 47 per cent of the Victorian Government’s income from tax which is an extraordinary proportion for a single industry to absorb. The REIV continues to advocate for the Government to reduce its reliance on property taxes such as stamp duty.

Victoria must have a competitive property tax regime to encourage investment and jobs. A more efficient tax system will have positive flow-on effects for our economy; it will make housing more affordable, ensure Victoria attracts foreign investment, unlock productivity, create jobs and provide a fairer revenue base for Government.