Allan government set to charge landlords a higher rate under new levy to fund emergency services

Victorian landlords are about to take another hip pocket hit, with the Allan government set to charge them a higher rate under its new levy to fund the state’s emergency services.

Victorian landlords are about to take another hip pocket hit, with the Allan government planning to charge them a higher rate than owner occupiers under its new levy to fund Victoria’s emergency services.

This month, the Labor government introduced new legislation to parliament to replace the Fire Services Levy with the expanded Emergency Services and Volunteers Fund.

The move will see an extra $2bn ripped out of landowners over the forward estimates, but the bill’s details reveal that landlords will bear a large brunt of the new cost bringing them more into line with commercial and industrial properties.

Under the previous levy, all residential properties were classified as the same and taxed the same.

The move to charge landlords higher costs comes after rental property owners have already been hit with additional charges, prompting many to sell up.

Victorian landlords are about to take another hip pocket hit. Picture: David Crosling

The Allan Labor government hiked land taxes to recoup Covid debt in 2023 and also introduced a series of minimum standards and law changes giving tenants more rights.

The new higher volunteer levy rate will also apply to short-term rentals, which were hit with the new 7.5 per cent short-stay tax on January 1.

One elderly landlord in regional Victoria, who asked to remain anonymous, said his tenants would have to cover the cost.

“I try to keep rental costs low, but I can’t do that anymore,” he told the Herald Sun.

“The government already increased my costs by more than $1000 a year.

“There’s no room left. That money has to come from somewhere, and I don’t have any more in my pocket to give,” he said.

If the bill is passed the increased taxes will take effect on July 1, but to help with the transition, property owners will receive a 50 per cent discount in the first year.

But this will only apply to the owner’s principal place of residence.

Nationals Leader Danny O’Brien warned the added cost would hugely impact rental affordability in Victoria. Picture: David Crosling

The full levy costs, listed on council rate notices, will start to arrive in mailboxes in mid-2026, ahead of the state election.

When introducing the new levy to parliament, Treasurer Jaclyn Symes said the overhaul was imperative to fund volunteer agencies but admitted it would cost landowners more.

A Victorian government spokesperson defended the move to hit up landlords with higher costs.”

Victoria is one of the most fire-prone areas in the world, and natural disasters such as fire, floods, and storms are becoming more frequent and severe,” they said.

“We’re making sure our emergency services have the sustainable funding and equipment they need to keep Victorians safe and to recover from natural disasters.”

However, Nationals Leader Danny O’Brien warned the added cost would hugely impact rental affordability in Victoria.

“This is yet another tax on Victorians and their property, which will lead to further increased costs for housing,” he said.

“With both the variable rate and the fixed charge doubling for rental providers, this will be more costs passed on to renters, hurting them further at a time when the cost of living is already biting.”

Treasurer Jaclyn Symes said the overhaul was imperative to fund volunteer agencies but admitted it would cost landowners more. Picture: David Caird

Opposition treasurer James Newbury said:

“For many property investors who offer their homes to rent, this sneaky new tax will be the nail in the coffin.

“Labor keeps bashing property owners over the head, which is forcing them to sell and collapsing the rental market.”

Data shows property investors have been leaving Victoria in droves, fuelled by higher land taxes and stricter rental regulations.

By September 2024, there were 652,766 active rental bonds in Victoria, a decrease from 677,492 in September 2023.

Industry leaders have called on the state government to address the issue by easing the continuous rental reforms implemented since 2019 for landlords.

Over the past decade, the number of rental properties available in Victoria has dropped 12.8 per cent overall, putting more pressure on those trying to find a home.

Originally published as Allan government set to charge landlords a higher rate under new levy to fund emergency services