Report finds Victorians will pay more property tax than anyone else in the country next financial year - ABC News

In short: Research shows Victorians will pay the highest rate of property tax in the country
What's next? The state opposition says the high tax rates will affect housing affordability

Victoria has the highest property tax rates in the country, according to research by the state's Parliamentary Budget Office (PBO).

The research was commissioned by the state opposition and found Victorians will pay an average of around $2,100 in property tax in the 2023-24 financial year.

In comparison, people in New South Wales will pay around $1,650 and Queensland residents will pay around $1,340.

The report found property tax revenue will make up around 16.3 per cent of Victoria's total revenue, compared to 12.7 per cent in NSW and nine per cent in Queensland.

The PBO report found Victoria is expected to rely more heavily on land tax to generate revenue than any other state in the next few years.

"This reliance on land tax partly reflects lower revenue from other sources, such as commonwealth grant revenue and royalties," the report said.

Opposition MP Jess Wilson commissioned the report and said the taxes are affecting housing affordability.

"For aspiring home owners it means higher house prices, for renters it means higher rents when Victorians are already experiencing the fastest rent increases than any other state," she said.

"It means fewer homes, it means as property owners are slugged with higher land tax bills less and less homes are going to come into the rental market and that's not going to fix our housing supply shortage in Victoria."

The state government said the report showed forecasts for total property tax revenue were "broadly similar in Victoria and New South Wales".

"The report also notes that these figures cherry-pick one tax type, and don't show the whole picture — 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," the government said in a statement.

"Using the latest ABS data on overall tax, Victoria remains the second-lowest revenue state in the nation."

The government announced in the state budget in May that the threshold for Victoria's land tax will be lowered from $300,000 to $50,000.

The annual charge will apply to investment properties and holiday homes, not the family home. It is expected to apply to about 380,000 home owners who would previously not have paid the tax.

An annual charge of $500 will apply to affected properties between $50,000 and $100,000 as part of the 10-year levy.

A charge of $975 will apply for property landholdings worth between $100,000 and $300,000, while land tax rates for properties above $300,000 will rise by $975 plus 0.1 per cent of the land's value.

The government estimated about 860,000 landowners would be affected.

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