Looming land tax bills force Victorian landlords to sell or hike rent

Sky-high land tax bills are forcing the hand of hardworking landlords — with many either selling or hiking rent to make ends meet.

Victorian families and landlords are planning to sell up their properties or hike rents in the bid to foot crippling land tax bills that have started arriving in the mail.

In 2023, the Allan Labor Government’ hiked land taxes to recoup Covid debt, but property owners are only just now feeling the damage, being hit with huge bills after a series of painful interest rate hikes in the past 12 months.

Dozens of property owners have told the Herald Sun that they can no longer afford the “unmanageable cost increases”.

One elderly landlord in regional Victoria, who asked to remain anonymous, said he had kept rents low during the rental crisis to help his tenant, a single mum.

Crippling land tax bills are forcing landlords to sell or hike rental prices.

However, after his land tax bill skyrocketed he said he has no choice now but to raise the rent and potentially evict his tenant.

Another property owner, Andrew Robertson, says his family was hit with a $43,000 bill for a beach shack in Safety Beach which has been in his wife’s family since the 1940s.

“We inherited a few years ago and the whole family uses it. We do not rent it out.

“Since 2021, the land tax on this simple holiday home has increased from around $12,000 to $43,000.

“It’s outrageous. No one can budget for a few hundred per cent in increased costs in a few years.”

“The irony is that we were the ones on lockdown and now we are paying for it again.”

Victorian premier Jacinta Allan. Picture: Ian Currie

In some cases, seen by the Herald Sun, landowners, who are already struggling with rising interest rate costs had land tax bills that had tripled in just 12 months.

Thousands of more Victorians will also be feeling the pain for the first time after Treasurer Tim Pallas made changes to land tax in 2023 to recoup $1 billion of Covid debt.

An estimated 380,000 properties could now be liable for tax after the threshold land value was decreased from $300,000 to $50,000.

Additionally, tax rates were hiked, and owners would also be hit with a flat rate Covid levy, which has been locked in for 10 years.

Some Victorians’ land tax bills have tripled in just 12 months.

This starts at $500 for a parcel of land worth $50,000-$100,000.

Owners of land worth more than $100,000 face a $975 fixed charge.

Nationals Member for Gippsland South, Danny O’Brien said the tax will be a shock for many people hit for the first time and he urged them to check their liability with people reporting being incorrectly invoiced.

“The most common exemption is if the property is your principal place of residence or if the land is used for primary production, however there are also other exemptions that certain community groups and not-for-profit organisations may be eligible for,” he shared.

A government spokesman said: “the land tax changes are temporary measures as part of Victoria’s Covid Debt Repayment Plan – because it’s only fair that those with greater capacity to pay, like owners of multiple properties, contribute.

“Land tax assessments move with land values. Victoria’s land tax scale remains progressive and ensures that smaller property investors pay proportionally less than those with larger landholdings.”