Land Tax Increases affects Renters

Victorian Government cashes in on increased real estate valuations

People renting in Victoria could face a jump in their weekly rent as property owners seek to cover the cost of rising state land taxes.  These increases could be as high as $30 to $35 a week.

Land tax rises were damaging investor confidence and would inevitably drive up rents according to  Robyn Waters Real Estate Institute of Victoria president.

“If landlords are being excessively taxed every which way they turn… they will struggle to make a profit or even cover their costs,” MS Waters said.

Compounding the situation, rental vacancy rates are at record lows of less than 2 per cent, down from 2.9 per cent from previous years, so the demand for available properties is also forcing up rents.

“People are telling us that they’re now looking to invest elsewhere, such as super, shares or savings to make more money from their outlay,” Ms Waters said. 

“If potential investors are not attracted to the property market and existing investors pull out, then we would expect to see vacancy rates fall further and rents increase.”

Property Investors have had land tax bills increases by tens of thousands of dollars on the back of recent land revaluations. More property owners are forced to pay the land levy this year because the tax-free threshold of $250,000 hasn’t changed since 2008-2009.

The State Government budget expects Land tax to deliver $3.09 billion to the state coffers this financial year, up from $2.36 billion in 2017-2018 – a rise of 31 per cent.

Real Estate agents are reporting some property owners had been hit with land tax increases of up to 600 per cent. 

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