The Victorian Liberals and Nationals have announced a plan to abolish stamp duty for first home buyers on properties valued up to $1 million. Shadow Treasurer James Newbury revealed the policy ahead of his Budget Reply speech, calling it a direct way to ease the financial pressure on young people trying to get into the housing market.
At present, the Labor government offers a full exemption from stamp duty for homes priced up to $600,000. A discounted rate applies up to $750,000, and there’s a $10,000 First Home Owner Grant for new builds below that threshold. The Opposition’s plan would effectively lift that cap, offering full stamp duty relief on homes—new or established—up to $1 million.
It’s a sizeable gap. Based on current rates, a buyer purchasing a $750,000 property would pay around $40,000 in stamp duty. Under the Opposition’s proposal, that would drop to zero.
Opposition Leader Brad Battin framed the change as a move to support aspiration and inject confidence into a sluggish property market. “This is about helping people break into the market, not taxing them out of it,” he said. “Labor’s focus has been on collecting more and more from property while home ownership rates decline.”
The Parliamentary Budget Office estimates the new policy could provide more than 17,000 exemptions in its first full year. The Liberals argue that this could also give a boost to construction, as off-the-plan homes are included.
Labor, however, has shown no signs of matching the offer. The 2025-26 Victorian Budget focused heavily on health, education and public transport. Its housing policy remains centred around existing concessions and grants for first home buyers. Treasurer Tim Pallas has previously defended the current settings, arguing they strike the right balance between affordability and budget repair.
The federal government, meanwhile, continues to support entry-level buyers through its Home Guarantee Scheme. Under that policy, eligible buyers can secure a home with as little as a 5% deposit, with the Commonwealth guaranteeing up to 15% of the value—removing the need for lenders mortgage insurance. The scheme has helped thousands enter the market earlier than they otherwise would have.
But there’s a catch. Critics argue that while removing taxes at the point of purchase may ease the burden for buyers, it could inflate demand in a market already stretched for supply. Without a parallel increase in housing stock, these types of reforms can push prices up. It’s a pattern seen in other states, where well-meaning incentives have sometimes led to price spikes rather than access.
Property analysts remain split. Some suggest that for buyers at the edge of affordability, scrapping stamp duty could be the difference between renting and owning. Others warn the overall effect might be to shift the price floor upwards, particularly in metropolitan areas where homes between $750,000 and $1 million are increasingly common.
The broader housing challenge in Victoria remains tied to supply. Vacancy rates are low, population growth is steady, and new builds are taking longer due to labour shortages and rising material costs. Without addressing these constraints, experts argue that any measure targeting buyers—however generous—will have limited long-term effect.
The Opposition insists the proposal is about fairness. “We’re backing renters who are stuck, not by choice, but by a tax system that penalises them at every turn,” Newbury said. “This is about restoring the first home dream.”
That sentiment may resonate with younger voters, many of whom are watching house prices creep out of reach despite working full time and saving diligently. But whether this change delivers lasting affordability or fuels another bump in house prices remains to be seen.
Housing policy is shaping up as one of the most contested battlegrounds. Labor is likely to argue its mix of modest concessions and investment in services is more sustainable. The Liberals will claim that scrapping stamp duty is the kind of bold move needed to break the deadlock.
Either way, first home buyers will be watching closely—because the cost of getting in doesn’t just depend on house prices. It depends on the fine print too.
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