Victoria has been labelled Australia’s most heavily taxed state when it comes to property, with new figures revealing land and property taxes have become a central pillar of the Allan government’s finances.
A report by the Parliamentary Budget Office (PBO) shows Victoria collects a higher share of property tax relative to the size of its economy than any other state. Land tax and land transfer duty now account for 2.6 per cent of Victoria’s gross state product, ahead of New South Wales at 2.4 per cent and well above Queensland’s 1.7 per cent.
According to the analysis, the Allan government collected $16.5 billion in property taxes in 2024–25, with that figure forecast to surge to $20.5 billion by 2028–29. By that time, property taxes alone are expected to make up 17.5 per cent of the state’s total revenue, up from 16.1 per cent in 2025–26.
On a per-capita basis, Victorians are paying the most land tax in the country. The average property tax take per person is forecast to rise from $2,450 this financial year to $2,710 by 2028–29, a level that significantly exceeds Queensland and rivals New South Wales.
The PBO attributes much of the burden to Victoria’s rigid land tax framework, including the Covid Debt Levy on landholdings. December’s budget update forecast the levy alone would raise $7.5 billion this financial year as the government seeks to manage soaring debt levels.
While New South Wales raises more land tax revenue in absolute terms, Victorians are hit hardest on a per-person basis. The report notes that Victoria’s heavy reliance on property taxes partly reflects weaker revenue from other sources, including Commonwealth grants and royalties.
Opposition Leader and treasury spokeswoman Jess Wilson said the findings explained why businesses increasingly view Victoria as an unattractive place to invest. She argued that under Labor, home ownership was slipping further out of reach for younger Victorians, with rising taxes pushing up rents, property prices and development costs.
The Property Council of Australia echoed those concerns, with Victorian executive director Cath Evans describing property as the state’s “cash cow”. She warned that continued tax increases on housing would undermine affordability, supply and long-term investment.
Property taxes already accounted for 42.4 per cent of Victoria’s total tax revenue last financial year, a figure expected to climb further as the government grapples with debt projected to reach $192.6 billion by 2028–29.
A government spokesperson defended the approach, arguing that the opposition had opposed planning reforms and failed to offer a credible alternative. The government insists Victoria continues to lead the nation in home approvals and construction, despite growing criticism over the state’s tax burden.
