The government has engineered a mess with no winners; renters lose, property investors lose and homeowners lose
For some, the only way to pay the exorbitant and ever increasing amounts of land tax imposed by the state government is to sell their property.
Rita Panahi
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Victoria is fast gaining a reputation as a broke state where businesses go bust and property values stagnate.
It’s a place where lifters are punished and leaners rewarded.
Property owners are among those being bled by the Jacinta Allan government with many under severe financial stress, unable to pay their annual land tax bill.
For some, the only way to pay the exorbitant and ever increasing amounts of land tax imposed by the state government is to sell their property.
Across country Victoria you’ll find towns with an inordinate number of ‘for sale’ signs, as investors and holiday home owners try to sell up.
It’s simply untenable for some owners to hold on to a property, particularly in cases where the annual land tax liability is equal to or greater than the rent received.
It’s little wonder that some landholders see each bill from the state revenue office as an anxiety-inducing nightmare.
Victoria has experienced a significant jump in the number of distressed listings with a 28.4 per cent spike from the previous year, according to the latest data released by SQM Research.
This refers to the number of properties being sold by owners under financial stress.
It’s all the more alarming given the Australian average sits at minus 3.1 per cent.
That means nationally there has been a decrease in the number of distressed listings while the Victorian number, the highest in the country, jumped another 5.6 per cent in October.
As first reported in the Sunday Herald Sun, thousands of Victorians are unwilling or unable to pay their land tax bills, and a third of unpaid bills are now more than 12 months overdue.
The state government has expanded the number of properties being taxed.
Instead of addressing the bracket creep that has seen some landholders’ bills triple and even quadruple in a few short years, the government is reducing the land tax threshold.
As landlords sell, the pool of rental properties decreases, putting further upward pressure on rents.
The Victorian government has engineered a mess with no winners; renters lose, property investors lose and homeowners lose.
Even first-home buyers lose in this scenario, with many thinking twice about buying in a state where property prices have gone backwards while owners in Sydney, Brisbane, Adelaide, Perth, Hobart and Darwin saw their investment grow in the past 12 months.
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