Victorian property investors still jumping ship more than 12 months since land tax hike, exacerbating rent crisis
Victorian property investors are still bidding farewell to the state in throngs, as a land tax increase introduced more than 12 months ago continues to bite.
Victorian landlords are continuing to abandon the state in droves more than a year since the state government hiked land tax.
New Ray White figures show that investors owned more than a third of the 4332 Melbourne homes the agency auctioned in the 12 months to February 6, 2025.
And 32.2 per cent of regional Victoria auctions consisted of properties belonging to investors.
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Last January, Premier Jacinta Allan’s government introduced higher land taxes for people who own an investment or secondary property, such as a holiday home, worth $50,000 or more.
Ray White Group’s chief economist Nerida Conisbee said that Victoria now wore the “unenviable title of having the highest property taxes in Australia”.
Ms Conisbee said this was the result of adding land tax to other charges piled upon the state’s investors including stamp duty, a vacant residential land tax, absentee owner surcharge and foreign purchaser additional duty, plus the federal government’s capital gains tax and council rates.
“The consequences of this high-tax environment are far-reaching,” Ms Conisbee said.
“The backbone of the rental market – individual investors – are shying away and limiting the number of rental properties.”
PropTrack senior economist Paul Ryan said the organisation’s analysis suggested the number of Victorian investors selling up was about 10 per cent higher than in NSW and Queensland, across the past 18 months.
But Mr Ryan noted there were still plenty of investors putting homes on the market in those two states, potentially due to the heightened cost of living and interest rates.
Mr Ryan predicted a jump in homebuyer activity if the Reserve Bank of Australia reduced the nation’s official cash rate at its next meeting on February 18.
“I think there will be a boost to the market but we’ll have to wait to see how much of a boost,” he said.
“We saw a strong start to last year and all the signals point to a strong year this year in auction activity, maybe not quite as strong as 2024.”
According to PropTrack, 679 Victorian homes will go under the hammer this week.
The state recorded a 60 per cent clearance rate last week.
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Originally published as Victorian property investors still jumping ship more than 12 months since land tax hike, exacerbating rent crisis
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