The Victorian Government has just introduced a new land tax in 2024 that is set to affect more than 800,000 Victorians.
The tax was introduced in May 2023 as a means of paying off the substantial level of debt accrued by the Victorian Government throughout the COVID-19 pandemic.
Previously, Victorians weren’t required to pay any land taxes if the value of their properties was under $300,000.
According to new modelling from the Victorian State Budget Office, the land tax alone is set to generate $1 billion in additional state government revenue than initially projected.
Alice Stolz, Managing Editor of Domain, believes that a plethora of new levy payers will be captured by the tax changes.
Ms. Stolz also articulated her belief that the additional tax will push many families to a breaking point.
“We need to remember that people are also paying for mortgages on these properties. In the case of holiday homes, they’re often inherited shacks that have been handed down through generations.”
Revenue Raising
The debt recovery plan doesn’t just comprise property tax hikes either. The Victorian Government is seeking to pay off its COVID-19 debt through a variety of different avenues.Victorian businesses with payrolls exceeding $10,000,000 annually will be required to pay an additional payroll tax. A 42 percent increase to the Workcover Premium will also be introduced for employers.
Road safety cameras will also contribute to additional state revenue thanks to Victoria’s newly implemented mobile phone and speed detection cameras.
Public transport will also set Victorians back more in 2024. Daily full-fare tickets will increase to $10.60, while concession fares will rise to $5.30.
Victorians will pay more for road usage across the state as well, with 24-hour passes issued CityLink—the state’s largest toll company—increasing by 23 cents.
The cost of number plates, which are all issued by the government, has all increased by $15 since New Year’s Day.
Victorian Health Minister Mary-Anne Thomas has defended the levies, maintaining their necessity.
“What we have done is made a commitment to the people of Victoria that we will pay down the COVID debt,” Ms. Anne-Thomas told reporters on Jan. 4.
“The land tax, of course, is being applied—it’s important to note—only to second homes or indeed multiple properties—not to the family home.”
Victorian Opposition Leader John Pesutto, however, isn’t particularly impressed.
“This tax grab by Jacinta Allen’s Labor government is a desperate attempt to plug massive budget holes that have been caused by years of cost blowouts, waste, mismanagement, and even corruption,” Mr. Pesutto said.
Australian government debt as a percentage of gross domestic product (GDP) now sits at its highest level since World War 2. It currently sits at 42.5 percent and is projected to increase further in the coming years.
Victoria, in particular, needed a large amount of debt to finance the imposition of some of the most extensive and stringent COVID-19 mandates seen across the nation.
