The History of Stamp Duty in Melbourne
Updated: Jun 29, 2020
Mortgage Stamp Duty 1886
As a Mortgage Broker in Melbourne, we deal with Stamp Duty calculations all the time. The most painful expense of any real estate purchase is the State Government imposed Stamp Duty fee. On an $800,000 owner occupied purchase, the current Stamp Duty charge in Victoria (as at April 2020) is an eye watering $43,070! Stamp Duty on real estate transfers is charged on a sliding scale. The lower the purchase price the lower the stamp duty charge.
The higher the purchase price the higher the stamp duty charge. A classic example of “taxing the wealthy to help the poor”. This is a concept that dates back to early religious doctrines with legislation first passed in 16th Century England.
Stamp Duty on real estate transfers in Victoria began way back in 1879 when legislation for the granting, management and collection of stamp duties was introduced. As can be seen in this original mortgage document, stamp duty was collected by the Registrar General of The Colony of Victoria (now the State Revenue Office), which was initially a branch of the Attorney General’s Department.
In the 2018/19 year, the State Revenue Office collected a whopping $6.09 Billion dollars in total Stamp Duty. This made up a significant chunk of the State Governments total revenue. In fact, in 2018, the Age newspaper estimated that Stamp Duty revenue accounts for 30% of all state government revenue. When the property market booms, so do the government coffers!
So why is it called “Stamp” duty? The early mortgage documents actually had a stamp on them confirming the relevant fee. You can see this in the original mortgage document from 1886 which attracted a “half-crown” levy. This particular mortgage document was printed at 77 Chancery Lane, Melbourne. This location is literally the corner road of the Melbourne Mortgage Advice office at 430 Little Collins Street!
Whilst the days of actually stamping a document to confirm the duty are long gone, the practise is fundamentally the same, 141 years later. To understand more about how fees and charges can affect your property transaction, get in touch with us today. As your Melbourne Mortgage Broker we are always here to help.