By Jack Nevile & Anna-Nikol Tanti

Victoria is the place to be – taxed. The government has unveiled a host of new property taxes over recent years. Property is a great way for governments to raise revenue because there is no escape – owners can’t pick up the land and take it elsewhere. The only way out is to sell and pay the tax upon settlement. And if you decide not to pay, don’t worry – they’ll sell it for you. 

Any increased cost of owning property is factored into the current price. While slightly up, Victorian prices have actually fallen over the past few years after adjusting for inflation. In plain English, this means that your house which was worth 10,000 trips to the supermarket a few years ago may only be worth 8,000 trips now. This is good news for first home buyers, who are seeing the benefit of rising wages, falling prices, and generous government handouts. 

These falling prices contrast dramatically to other states which don’t have these taxes. The figures below depict 12 months of price changes of Australian property in certain cities. Notice the odd man out? 

graph showing price changes in australia

(h/t to @rabbit_wealth on Twitter)


So what are the taxes that property owners need to be aware of? We’ve simplified them below.


One-off taxes

Stamp Duty

Stamp duty is 5.5% of the purchase price. Victorian stamp duty is very high in comparison to other states as the reductions/exemptions cap is at a very low level – only $750,000, which hardly buys anything in the metro area these days. 

If you’re a foreign purchaser, you must pay Foreign Purchaser Additional Duty. This is an additional 8% stamp duty. A foreign purchaser is not an Australian citizen or a Permanent Resident, or New Zealand citizen present in Australia at settlement. 

Windfall Gains Tax

Windfall gains tax applies to the rezoning of land that increases the value by more than $100,000. It is taxed at 50% of the capital gain. An exemption exists for residential property.

Metropolitan Planning Levy

This tax is payable if the estimated cost of a development in metropolitan Melbourne exceeds $1,207,000. The levy is $1.30 for every $1,000 of the estimated development costs. It is paid as part of your planning permit application.

Growth Areas Infrastructure Contribution

This tax is paid upon the purchase or development of a large piece of land within a growth-zoned area. Usually this is paid by the developers, who then pass it onto individual buyers in their sale prices.


The Foreign Investment Review Board charges $42,300 per million dollars or part thereof on the purchase price, for any foreigners looking to buy established Australian property. There is a significant discount for new property.


Taxes Payable Annually

Land Tax

Land tax is based on the total taxable value of all the land you own in Victoria, excluding exempt land. Exempt land includes land such as your home. Land tax is payable on investment properties, commercial properties and vacant land.

COVID Debt Repayment Plan

This is a “temporary” 10-year change to land tax. For people holding land valued between $50k and $100k, a $500 tax is payable. Between $100k and $300k, $975 is payable. For land holdings above $300k, $975 is payable plus an increase of 0.1% above standard land tax.

Commercial and Industrial Property Tax

This tax is for commercial and industrial properties and is a transition scheme away from stamp duty. It is levied at 1% of the land value.

Absentee Owner Surcharge

The absentee owner surcharge is a 4% tax on the value of all land in Victoria owned by an absentee owner. It is very expensive for land, and expensive on apartments.

An absentee owner is an individual that:

    • Is not an Australian citizen or permanent resident;
    • Does not ordinarily reside in Australia;
    • Was absent from Australia on 31 December 2023 for the purpose of the 2024 land tax assessment; and
    • Was absent for more than 6 months throughout 2023.
Vacancy Fee Return for Foreign Owners

Foreign Owners must lodge vacancy fee returns every year. If the property is not occupied or genuinely available for rent, you will be required to pay the current FIRB fee. You must lodge a Vacancy Fee Return even if the property is not vacant. You will be receiving email reminders about this every year.

Vacant Residential Land Tax

Homes that are vacant for more than 6 months per year are taxed at 1% of thier capital improved value, paid in addition to your land tax. This increases to 2% in the second year it remains vacant, and 3% in the third, where it stops.

Council Rates

Council rates are a property tax used to fund community infrastructure and services. It is calculated by multiplying the value of the property by the rate in the dollar. The rate in the dollar is set by each council.

Fire Service Property Levy

This levy is used to fund Victoria’s fire and emergency services. It is paid annually and includes both a fixed and variable rate. The fixed charge for 2024 (including vacant land) is $132 for residential and $267 for non-residential land. The variable rate depends on the capital improvement value of the land and the land use classification.


When will the property taxes stop coming? 

Australians love property – bidding the prices up to astronomical heights is our national obsession. Governments love spending money, and they tax where the money is. At some point, these two opposing forces are going to collide. Victoria is simply the canary in the coal mine.


Disclaimer: This publication contains comments of a general and introductory nature only and is provided as an information service. It is not intended to be relied upon as, nor is it a substitute for specific professional legal advice. You should always speak to us and obtain legal advice before taking any action relating to matters raised in this publication.