Victoria’s budget is set to worsen, with the Albanese government’s negative gearing and capital gains tax changes expected to reduce stamp duty receipts enough to scrap the state’s surplus.
The Allan government projected a $1 billion surplus for the 2026-27 financial year in its May budget, a figure underpinned by $10 billion in stamp duty.
However new figures from the Real Estate Institute of Victoria show Melbourne house prices have plummeted since the Albanese government introduced its negative gearing and capital gains tax changes.
The figures show that in the June quarter, Melbourne’s median house price fell by 3.1 per cent to $952,500 – a drop of $30,000.
The median prices for units also fell by 2.1 per cent to $643,500 in the three months to June 30, a drop of $13,500.
In its reporting of the data, RealEstate.com.au revealed there was also evidence home sales were concentrating in lower price brackets, which are likely to have a higher number of first-home buyers who benefit from stamp duty tax concessions.
Victoria’s budget projected stamp duty revenues would fall from $10.6 billion to $10 billion in the 2026-27 financial year, before climbing back to $12.4 billion by 2029-30.
But property expert and SQM Research founder Louis Christopher said the house data showed Victoria’s budget projections had become out of date the day the federal government announced its negative gearing changes.
“Victoria has booked a stamp duty recovery that the federal government’s own tax changes have quietly cancelled,” Mr Christopher told RealEstate.com.au
Mr Christopher said recent property data showed Victoria’s stamp duty revenue could fall by as much as $1.5 billion to $2.5 billion, “more than enough to wipe out the state’s projected $1 billion surplus by itself.
The warning is the latest in a series of impacts the Albanese government’s tax changes are having on Australia’s housing market. However figures from the latest Sky News Pulse / YouGov poll show broad support for a reduction in house prices.
The figures, which come from a nationally representative poll of 1502 Australians, show 49 per cent of voters want property prices to decline, with 26 per cent saying they want them to remain the same and just 17 per cent wanting them to rise.
Support for falling prices was strongest among Greens voters, at 73 per cent, with 55 per cent of Labor voters also wanting prices to fall.
While only 42 per cent of Coalition voters and 41 per cent of One Nation voters wanted property prices to fall, this was still a plurality of the voters for each of the two parties.