Victorians are poised to be slugged with the most property tax in the country this year and beyond but NSW won’t be too far behind.
A Victorian Parliamentary Budget Office report has revealed Victoria and NSW’s heavy reliance on property taxes, with both states generating substantially more revenue per person through stamp duty and land tax than other Australian jurisdictions.
Victoria is expected to post the second highest revenue total from property taxes of all Australian states and territories behind NSW in 2022/23, according to the report by the independent budget office.
Total property tax revenue for both Victoria and NSW is projected to be broadly similar from 2023/24 and beyond.
But Victoria is forecast to rake in the highest per capita property tax revenue of all the states until 2026/27, with its residents to fork out $2120 per person on average in 2023/24.
Over the same period, NSW residents will pay $1646 in property taxes and Queenslanders will cough up $1343.
Victoria’s combined property tax revenue per person was expected to be about 21 per cent higher than in NSW in 2025/26.
“Victoria is expected to rely more heavily on property taxes to generate revenue than any other state,” said the report, compiled at the request of the Victorian opposition.
Pointing to the latest Australian Bureau of Statistics data on overall tax, the Victorian government said it remains the second-lowest revenue state in the country.
“The report also notes these figures cherry-pick one tax type and don’t show the whole picture,” a Victorian government spokesman said.
“Australian states have structurally different economies and different levels of reliance on revenue sources, and it does not consider revenue sources other than land transfer duty and land tax.”
From January, 860,000 landlords and holiday home owners in Victoria will pay $1300 a year on average in extra land tax as part of a 10-year COVID debt levy.
Victorian Opposition Leader John Pesutto blamed government waste and mismanagement for the state’s high taxes and said every extra dollar in property taxes was all but certain to heap more pressure on rents and property prices.
“We need the government to start listening … to the solutions that are required such as releasing more supply into the market,” he told reporters.
“Instead we’ve got a government with its head in the sand, addicted to taxing Victorians more and more.”
In NSW, the Labor government axed a plan by the former coalition administration to begin weaning the state off stamp duty, by offering an opt-in land tax scheme as an alternative.
Stamp duty waivers and concessions for first home buyers were recently increased to ensure they applied to all properties up to $1 million, acting NSW Premier Prue Car said.
That let thousands of people into what was an increasingly impossible property market, she said.
“In the past, the NSW government has relied a lot on stamp duty,” Ms Car told reporters.
“This new NSW government has actually given significant concessions particularly to people who are struggling to get into the market for the first time.
“That’s where our priority is.”
NSW is yet to release a state budget for 2023/24.
Cassandra Morgan, Luke Costin and Callum Godde
(Australian Associated Press)