THE election campaign hasn't formally begun yet, but the baby kissing has, and so has the big spending. Victorian stamp duty rates - the highest in the nation - will be cut from 6 per cent to 5 per cent for most home buyers under a $600 million plan by the Bracks Government aimed at quelling suburban anger over housing affordability.
Two days out from the start of the campaign, Steve Bracks also announced that the state's $3000 first-home buyers' grant would be extended for two years and increased to $5000 for new homes. The moves - held back from the May budget - are designed to return some of the massive windfalls the Government reaped through stamp duty during the housing boom.
But the lower tax rate - for homes worth between $150,000 and $500,000 - won't apply to first-time buyers who take up the state Government's $3000 or $5000 grant.
The cuts come as the Premier prepares to visit the Governor tomorrow for the formal start to a state election campaign that Newspoll predicts his Labor Party will win comfortably.
Mr Bracks said his policy would see stamp duty cut by 14per cent to $15,560 on the median house price of $375,000.
"We recognise that higher interest rates, which are expected to increase again next month, and rising house prices have put pressure on Victorian families," he said. "This is affordable, and all the policies we have announced are within the forward estimates - the $350 million average surplus in the future."
Victoria's median house price has more than doubled to $375,000 since 1999, and the Bracks Government raked in $2.6 billion in stamp duty in the past financial year.
The stamp duty cuts do not apply to investment properties, and first-home buyers will have a choice between receiving the grant or the stamp duty cut, with most expected to take the higher-value grant. The policy also includes $60million for 350 new public housing homes or units.
Opposition finance spokesman Robert Clark said Victorian home buyers were still paying thousands more in taxes than those in NSW and Queensland, and that the cuts were no help to first-home buyers. "Reading between the spin, a first-home buyer forfeits the first-home bonus if they claim the lower rate of stamp duty," he said.
buyer of an established home will pay the same stamp duty as they do now, and get just the same $3000 first-home bonus that they do now."Mr Clark said first-home buyers purchasing a $350,000 house in NSW paid no government charges and Queensland buyers paid just $2750 compared to at least $11,660 in Victoria.
But Treasurer John Brumby said that with the new rates, someone buying the median house paid less now in stamp duty as a proportion of the purchase price than in 1999.
Real Estate Institute of Victoria figures show that while the median price of a house in Melbourne has increased by 105 per cent since 1999, stamp duty payable has increased by 179 per cent.
Institute chief executive Enzo Raimondo welcomed the policy yesterday as the most substantial change to stamp duty in a decade.
"With Melbourne's median price for a house almost at an all-time high, first-home buyers and families in the middle bracket really need assistance, and now they will get it," he said.
Opposition Leader Ted Baillieu - who has promised to cut stamp duty without announcing specific moves - said he would study the policy before announcing his own, closer to the November 25 poll.
