Victoria was the most locked-down state in Australia, if not the world during Covid, resulting in the Victorian Government accruing over $30 Billion in debt to keep the doors closed.
Victorian Statement Government wants to raise $8.6 Billion over the next 4 years by targeting, property investors and big businesses.
- Big Businesses by Increasing Payroll Taxes.
- Investors in Victorian Properties by reducing the land tax threshold from $300,000 to $50,000, effective from the 1st of January 2024.
- The measures are planned to last 10 years.
New Land Tax Thresholds – COVID-19 debt – land tax surcharge
Landholdings between $50,000 and $100,000 will have to pay an extra $500 annual fee on top of the increased land tax levy.
Landholdings between $100,000 to $300,000 will pay an extra $975 annual fee on top of the increased land tax levy.
The increase in land tax payable is estimated to affect around 860,000 Victorians Investors to help the Victorian Labour Government raise $4.7 Billion over 4 years to help pay down the $30 Billion Covid Debt.
PIPA and PICA analysis conservatively estimates a Victorian Investor with land holdings of $1,000,000 will be subject to an additional $20,000 in land taxes over and above the existing levies over the next 10 years.
General (individuals only) Land Tax Threshold in other states
It’s unfortunate, that any increase in costs to investors by state governments all over Australia, will ultimately be paid by the renters, as investors will be forced to pass these types of costs on.
If you are looking to invest in properties around Australia, it’s important to consider strategies to minimise your exposure to every state of Australia’s Land Taxes.
Garry Wolnarek our principal property tax specialist at Umbrella Property Accountants, specialises in Property Investor-State and Federal taxes, and how to plan and minimise them.
If you would like any further advice, please book a meeting to discuss how we can help plan for the not so oblivious taxes, that are not so apparent at the time of investing around Australia but have a habit of biting you later.