Inquiry into Land Transfer Duty Fees

Land transfer duty fees (commonly known as stamp duty) are a burden on homebuyers and discourage homeowners and renters from moving. Current exemptions provide a handout to the already well-off, and create an additional barrier to social mobility. Stamp duty is an inconsistent funding source for the government because it is highly dependent not only on housing prices, but also on the number of house sales that occur in a given year. These issues among others have led the Australian Treasury to estimate the marginal excess burden of taxation via stamp duty at 72 cents per dollar raised.

Land transfer duties are a burden on homebuyers and discourage homeowners and renters from moving. Whether we’re talking about a family that needs an extra bedroom, a family moving into a new city, or older couples downsizing, stamp duty is an additional burden that prevents households from finding the right space for them. The more often a person has to move, the more stamp duty they will inevitably have to pay.

As of December 2022, the stamp duty payable on the median house price in Melbourne is $56,8102 . This is more than 50 percent of the median Melbourne household’s income, meaning that to purchase a home in Victoria is to pay more than half a year of your whole household’s income in up-front taxes. Moreover, land transfer duties are regressive because they force families on lower incomes to spend proportionally more on housing costs than wealthier households.