Parliamentary Budget Office report shows Victoria collects the highest property tax revenue as a share of total revenue of all the states

The Andrews government collects more revenue from stamp duty and land tax than any other state – and the tax grab is set to get worse.

Victorians are paying more property tax than anyone else in Australia – and it’s going to get worse.

A report by the Parliamentary Budget Office forecasts the Andrews government will collect more in stamp duty and land tax revenue per person than any other state until at least 2025-26.

The tax take is expected to increase to $2120 for every Victorian this financial year, about 9 per cent higher than in NSW.

But the gap between the two highest property taxing states will rise to 21 per cent by 2024-25, by which time Victorians are expected to be paying an average of $2304 each in property taxes.

The Andrews government will collect more in stamp duty and land tax revenue per person than any other state until at least 2025-26. Picture: Andrew Henshaw

The report shows Victoria will also collect the highest property tax revenue as a share of total revenue of all the states until at least 2027, climbing from 16.3 per cent to 17.4 per cent.

As a share of Victoria’s total tax revenue, property taxes are forecast to increase from 41.8 per cent to 43.1 per cent by in 2026-27.

“Victoria’s reliance on property taxes partly reflects lower revenue from other sources, such as Commonwealth grant revenue and royalties,” the report said.

“Victoria and NSW generate substantially more revenue as a share of total state revenue than other states for both land transfer duty and land tax.”

The report says Victoria’s reliance on property taxes partly reflects lower revenue from other sources. Picture: iStock

Opposition Home Ownership and Housing Affordability spokeswoman Jess Wilson said the analysis showed state government policies had made homes less affordable.

May’s budget increased land taxes for Victorians with a second property and businesses with a payroll of more than $10m a year. In total, the twin tax increases will raise $8.6bn – all of which will be used to pay what Treasurer Tim Pallas has called “Covid debt” over the next 10 years.

“Finding an affordable and secure place to call home is already challenging enough, yet instead of easing pressure, the Andrews government’s property taxes are punishing those who can least afford it,” Ms Wilson said.

“We have a very serious demand and supply housing problem in Victoria, and the Andrews government’s answer to this was to expand and increase property taxes in this year’s budget – only exacerbating the problem and making it harder for Victorians to find a place to call home.

“With state net debt, interest repayments and cost blowouts all continuing to escalate, Victoria needs a government with financial discipline, not one that uses higher taxes to pay for its own mistakes.”

Victoria’s tax revenue is on track to climb to $40bn – double what it was in 2015-16.

In 2023-24, the state government will collect an average of $5074 in state taxes per person.

That compares with $4707 in NSW, $3647 in Queensland, $2970 in South Australia and $2900 in Tasmania.

In April the Herald Sun revealed Victoria was paying more per person in state and council tax than any other state in Australia – the first time in a decade it had eclipsed NSW.

Opposition Leader John Pesutto said Victorians were paying the highest taxes in the nation “because of the waste and mismanagement of the Andrews government”.

“Every extra dollar in property taxes adds more pressure on rents and property prices at a time Victorians are already struggling to make ends meet,” he said.

“With Victoria’s rents already rising … higher property taxes will only make a bad situation worse.”