From $8b to $20b: The huge increase in this tax
A major tax hike is shaking up Victoria’s property scene, with the state becoming “too expensive and too risky”, prompting investors to look towards New South Wales and Queensland.
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Labor has more than doubled its tax take from property owners and investors since coming to power in 2014, with the government’s $20 billion haul driving critical investment to NSW and Queensland.
Property experts say Victoria is increasingly being considered “too expensive and too risky” prompting key projects to be abandoned or deemed unfeasible.
It comes as the last month’s state budget showed the government was expecting to reel in a whopping $19.8 billion from the state’s 18 property taxes, including land taxes, windfall gains and the congestion levy, in 2025-2026.
The huge figure is a mammoth jump from just $8 billion the Andrews’ government delivered its first budget in 2015.
With data also showing overseas investment has plummeted since 2014, industry experts are warning that the government is running out of time to fix its ruthless tax regime to maintain any hope of building close to its goal of 800,000 homes by 2034.
Analysis by Charter Keck Cramer shows the percentage of foreign investment in new dwellings has dropped by about 25 per cent since a peak in 2014.
National Executive Director Richard Temlett said while foreign investors were still attracted to Victoria, they were forced to go elsewhere given the huge tax take.
“The fact that it is deciding to go elsewhere in Australia is a terrible result for Victoria,” he said.
Mr Temlett said unless immediate reforms were rolled out Victoria will “not hit the dwelling targets”.
Melbourne property industry heavyweight and managing director at Salta Properties Sam Tarascio said the cumulative impact of the taxes were “distorting feasibility” and “killing off good projects”.
“This has a flow on effect that ultimately results in Victorians missing out – less development means less housing, workplaces and precincts that stimulate our economy,” he said.
Mr Tarascio said foreign and interstate investors were prioritising Queensland and New South Wales, deeming Victoria “too risky and too expensive”.
A government spokesman, who noted stamp duty exemptions had been extended for first home buyers, said the latest data showed Victoria had built 15,600 more homes than New South Wales and 28,500 more than Queensland in 2024.
Property Council Victorian Executive Director Cath Evans said the huge drop in foreign investment since 2015 had resulted in the state’s economy losing out on an estimated $93 billion and nearly 90,000 local jobs.
“Not only are these taxes killing off homes - they’re also killing off Victorian jobs,” she said.
“The state has also lost out on revenue to the tune of nearly $200 million in stamp duty and land tax since the introduction of these taxes.”
“We urgently need increased supply to keep up with our growing population.”
Originally published as From $8b to $20b: The huge increase in this tax
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