Stamp Duty: Victoria’s Tax on Moving House

Stamp duty — officially land transfer duty — is effectively a tax on mobility. It doesn’t matter whether you are trying to enter the market, move to a larger home for a growing family, or downsize after the children have left. If you buy another property, the Victorian Government is waiting at settlement.

And compared with several other states and territories, the burden can be substantial.

For a Victorian property valued between $960,000 and $2 million, the general stamp duty rate is 5.5% of the purchase price. Above $2 million, duty rises to $110,000 plus 6.5% of the amount above $2 million.

That means the approximate Victorian stamp duty bill on a home purchased for:

$800,000 — $43,070
$1,000,000 — $55,000
$1,250,000 — $68,750
$1,500,000 — $82,500
$2,000,000 — $110,000

These aren't improvements to the property. They don't buy an extra bedroom, renovate the kitchen or reduce the mortgage. They are simply the tax cost of buying.

First Home Buyers Hit the Wall at $750,000

Victoria does provide assistance to first home buyers. Eligible purchasers pay no stamp duty up to $600,000, with a concession applying between $600,001 and $750,000.

The problem is what happens next.

Once the purchase price moves beyond $750,000, that first-home-buyer assistance disappears. At $800,000, for example, the normal Victorian duty calculation produces a bill of approximately $43,070.

Compare that with NSW, where eligible first home buyers currently receive a full transfer-duty exemption on homes up to $800,000 and a concession between $800,000 and $1 million.

Western Australia has also moved its first-home-buyer thresholds substantially higher. Since May 2026, eligible first home buyers can purchase a home for up to $600,000 without paying transfer duty, with concessions extending to $800,000.

Queensland goes further in another important respect: eligible owner-occupiers can access its home concession even if they have owned property previously, potentially saving up to $7,175.

Victoria's thresholds increasingly look disconnected from the prices buyers actually face across much of metropolitan Melbourne.

Downsizers Are Punished for Downsizing

Perhaps the most counterproductive aspect of stamp duty is its effect on downsizers.

Consider an older couple living in a large family home that no longer suits them. They might happily sell it to a younger family and purchase a smaller, lower-maintenance property for $1 million.

Victoria effectively says: that will be another $55,000, please.

So instead, many people understandably ask: why move?

They remain in a property larger than they require because the transaction costs involved in moving are simply too high.

That has consequences beyond the individual homeowner. Every downsizer who decides not to sell potentially keeps another family-sized property out of the market.

Stamp duty therefore doesn't just tax transactions — it can discourage the very movement of housing stock that could help the market operate more efficiently.

Upgraders Get Hit Too

The same problem confronts growing families.

Imagine a family selling an $850,000 home because they need more space and buying for $1.2 million.

They aren't simply funding the $350,000 difference between the properties.

They also face approximately $66,000 in Victorian stamp duty on the new purchase, before allowing for selling costs, conveyancing, moving expenses and other transaction costs.

That can turn what appears to be a $350,000 upgrade into a considerably larger financial exercise.

For families already dealing with mortgages and cost-of-living pressures, stamp duty becomes a genuine barrier to moving.

Other States Show There Are Alternatives

Australia doesn't have one uniform stamp-duty system.

NSW's general transfer-duty scale, for example, currently charges $11,602 plus 4.5% of the amount above $387,000 for properties up to $1.29 million, before moving to 5.5% above that threshold.

Tasmania's top general rate is $27,810 plus 4.5% of the amount above $725,000.

Western Australia's general scale tops out at $28,453 plus 5.15% above $725,000.

The ACT has taken a different philosophical approach again, progressively reducing conveyance duty as part of a longer-term tax reform program.

Not every jurisdiction is cheaper at every price point, and concessions vary considerably, but the comparisons highlight just how heavily Victorian buyers can be taxed when purchasing an ordinary metropolitan home.

A Tax That Works Against the Housing Market

Stamp duty is particularly insidious because it taxes people precisely when they are trying to make a significant life transition.

A young person buying their first home.

A couple starting a family and needing another bedroom.

Parents upgrading as their children grow.

Empty nesters wanting to downsize.

Older Victorians wanting something smaller and easier to maintain.

All of these moves help housing stock circulate through the market. Yet Victoria imposes a substantial financial penalty on many of them.

Good housing policy should encourage people to live in homes appropriate to their circumstances. Stamp duty can achieve the opposite.

At a time when governments continually talk about housing affordability, housing supply and helping first home buyers, surely it is time to have a serious conversation about one of the biggest upfront barriers of all.

Victoria doesn't just tax property ownership — through stamp duty, it heavily taxes the decision to move.

And ultimately, that makes housing less affordable and the market less efficient for everyone.