Melbourne Families Pay $200,000 MORE Than Queensland — Victoria Hidden Tax EXPOSED

Added: 2026-05-14

[00:00:00]Property investors face paying tens of thousands of dollars more in tax under big changes being juggled for next month's federal budget. Thousands of rentals are set to disappear from the market as rising taxes force landlords to sell up.

[00:00:16]>> The Victorian state government reduced the threshold for paying land tax on properties. It used to be second properties valued at 300,000.

[00:00:24]Now it's been reduced to 50,000.

[00:00:28]So, this is one of the biggest changes in my view for um land tax here in Victoria.

[00:00:33]>> Property investors are bracing for a shakeup in tax rules as part of next month's federal budget with some claiming changes will make the market even tougher for first home buyers. In our final edition of Home Truths, a prominent property agent says the Broom policies risk creating an economy of halves and have nots. Sam Gordon says he owns more than 150 properties and a fast growing buyers agency. What does he want to see in May's federal budget regards housing? Nothing. Literally.

[00:01:05]>> Don't touch policy.

[00:01:06]>> Here's what nobody is telling you about living in Victoria. If you own a home in Melbourne or you're thinking about buying one, the Victorian government is extracting more money from you than from any equivalent family in any other state in Australia.

[00:01:21]The Institute of Public Affairs confirmed in May 2025 that Victoria has the highest per capita state tax burden in the nation and the highest subnational government debt of any jurisdiction in the world. Not just Australia, the world. Victoria's net debt has exceeded 194 billion.

[00:01:45]And that debt is being serviced by you through a land tax threshold that starts at $50,000 in Victoria versus $1,75,000 in New South Wales and $600,000 in Queensland through a co debt repayment levy that doesn't exist in any other state through a growth areas infrastructure contribution that Queensland doesn't charge at all. through a vacant residential land tax that has been expanded statewide and through stamp duty, council rates, insurance premiums, and body corporate levies that are all running at or above the highest levels in the country.

[00:02:27]Over the last few years, the Victorian state government has expanded and increased a range of taxes to claw back debt accumulated during co >> I've seen situations where people's bills have actually tripled over the course of one year. Add it all up over 10 to 20 years and a Melbourne family is paying roughly $200,000 more than an identical family in Brisbane on an identical home in an identical income bracket. Making identical decisions. The only difference is the state line. Today I'm going to show you the three cost traps bleeding Melbourne families dry.

[00:03:06]the land tax gap, the hidden development taxes, and the compounding cost spiral with the Victorian government's own rate tables, the parliamentary budget offices own data, and real stories from families who've done the maths and left. Let's get into it. Right. This house was rented long-term, but its current owner had to sell.

[00:03:30]>> The costs and the expenses were just too, you know, too significant. The rent didn't cover interest rate rises, insuranceances, and safety inspections.

[00:03:39]For many, the Victorian government's latest investment property taxes are the last straw. Let's start with the single biggest cost gap between Victoria and Queensland. The one that hits your bank account every single year for as long as you hold a property. The state revenue office confirms Victoria's land tax threshold was cut to $50,000 from January 2024.

[00:04:06]That means if the combined site value of all property you own in Victoria exceeds $50,000, and for most Melbourne homeowners with a single investment property, it does, you're paying land tax. In Queensland, the threshold is $600,000.

[00:04:25]in New South Wales, $1,75,000.

[00:04:31]Translation: A Melbourne investor with $600,000 in site value is paying $2,250 per year in base land tax. A Brisbane investor with the same site value, zero.

[00:04:47]Nothing. Not a scent. And that's before the COVID debt repayment levy, a sir charge that Victoria added on top of all land tax assessments from 2024 running for a full 10 years to 2033.

[00:05:03]Queensland has no equivalent levy. No other state does. And the Victorian Parliamentary Budget Office, the state's own independent fiscal analysis body, confirmed the numbers. Victoria collects a higher proportion of its state revenue from property taxes than any other Australian state. Not by a little, by a margin that the PBO itself described as the highest in the country.

[00:05:32]>> Victorian state government reduced the threshold for paying land tax on properties. It used to be second properties valued at 300,000.

[00:05:41]Now it's been reduced to 50,000.

[00:05:44]So this is one of the biggest changes in my view for um land tax here in Victoria. So as you'll see in that first point there, it used to just be 16 in and middle suburbs here in Victoria, but as of this year that has increased to the whole of Victoria. The IPA's state economic scorecard for 2025 ranked Victoria last or near last on multiple economic measures, while Queensland consistently outperformed.

[00:06:13]Here's what that looks like for a real Victorian family. A poster on r/OS property chat described receiving their annual land tax bill and doing the maths against what they'd pay in Queensland.

[00:06:27]Their conclusion, the difference over 10 years is genuinely life-changing money.

[00:06:36]Another poster on the same forum debating which state to invest in next laid out the calculation.

[00:06:42]Land tax this year is $9,400.

[00:06:47]With rates, insurance, and the mortgage, I'm now $800 per month. In Queensland, the equivalent property pays zero land tax.

[00:07:00]$9,400 in land tax alone on top of everything else. In Queensland on the same property value, you'd pay nothing. But it gets worse. Here's what the data reveals.

[00:07:12]Over 12 months to June 2024, nearly 50,000 new investor loans were issued in Victoria. Despite this influx of new investors, the state still lost 21,712 rental properties net prop track analysts suggest this means as many as 70,000 investors may have sold their properties during this period. And a thread titled Vic land tax landed ouch captured the moment thousands of Victorian investors opened their envelopes in early 2024 and discovered the co sir charge had been stacked on top of the base rate with no property value change. just a policy change. The thread exploded with replies confirming the same experience. And the comparison thread that should terrify every Victorian investor ran on/ropy chat under the title, >> which state to invest, VIC land tax sucks. Multiple respondents confirmed they had redirected their investment capital from Victoria to Queensland specifically because of the land tax differential. Several named the co levy as the tipping point. Now to be fair, Queensland isn't tax-free. Queensland charges stamp duty. Queensland has council rates. Queensland's property prices in Brisbane have surged, meaning the deposit required is higher than it was 3 years ago, and Victoria does offer some concessions. There's a temporary stamp duty concession for off the plan apartment purchases, and the first homeowner grant still exists, but the structural gap in annual holding costs is so large that the concessions are a band-aid on a broken leg. The maths doesn't maths, mate. In January 2024, thousands of Victorian property investors opened their mailboxes to find land tax bills that were thousands of dollars higher than the previous year.

[00:09:11]Some bills doubled, some tripled.

[00:09:13]>> Last year, the state revenue office, which collects taxes on behalf of the state government, incorrectly sent 71 beach box owners a land tax bill. Some were up to $5,000.

[00:09:25]The beach boxes sit on crown land, so the government has no right to charge land tax for it.

[00:09:32]>> But here's what nobody is telling you.

[00:09:35]The land tax gap is only the first layer of the cost difference. There are taxes baked into every new Melbourne home that most buyers have never even heard of.

[00:09:46]And that don't exist in Queensland at all. And I can prove it with the Victorian government's own rate schedules.

[00:09:54]Right. The second cost trap is the growth areas infrastructure contribution G AIC.

[00:10:02]The Victorian State Revenue Office publishes the per hectare G AIC charges on its own website. This is a tax paid by developers on new housing land in Melbourne's growth corridors Craigy Burn Packenham whereby Clyde and it's baked directly into the land price you pay as a buyer. You never see a separate line item. It just shows up as a higher block price. Queensland has no equivalent charge. A new home in Springfield or North Lakes doesn't carry this hidden infrastructure tax.

[00:10:38]The planning Victoria GIC guidelines for 2025 show the exact per hectare contribution rates and worked examples and the cost per lot can run into tens of thousands of dollars that simply don't exist for an equivalent new build in Southeast Queensland.

[00:10:58]And then there's the vacant residential land tax expanded statewide from January 2025.

[00:11:06]If your property sits vacant for more than 6 months, you're hit with 1% of capital improved value in year 1, rising to 3% by year three.

[00:11:17]Queensland, no statewide vacancy tax exists, and ABC News in February 2026 reported that rising land prices inflated in part by these very taxes and charges have been identified as the single biggest obstacle to new housing supply. The taxes designed to solve the housing crisis are making it worse. And a poster on r/orspropy chat in early 2026 ran into the third cost trap, the one that catches you even when you try to leave. They described selling their Victorian investment property and settling within weeks. But the conveyancer told them they still owed $1,600 in land tax, the full annual amount, because Victoria charges land tax based on ownership on December 31st of the prior year, regardless of whether you sold in January. Their words, "We've been informed that we are liable for land tax on a property we no longer possess. Even when you leave Victoria, the tax follows you out the door."

[00:12:26]Victoria, the tax state. That's what actually should be on our number plates.

[00:12:31]If the average mom and dad buy an investment property, they're hit with land tax. If the average person buys a property, and it stays vacant cuz they can't rent it, they're hit with land tax and vacant land tax. If you're going to buy a home, your dream home, the government says, "Oh, we need some stamp duty tax, more tax." and a poster on R/orst Property Chat who held two Victorian investment properties discovered that Victoria calculates land tax on the combined value of all your holdings, not each separately. The result, a dramatically higher tax bracket on the second property than they expected.

[00:13:12]Their words described a total land tax bill of approximately $10,000 per year on $1.5 million in combined property value. $10,000 less available each year.

[00:13:28]In Queensland, on the same combined value, the land tax would be a fraction of that because Queensland's threshold alone is $600,000 before a single dollar is owed. and a thread on R/ Finance in June 2024 captured the ripple effect perfectly.

[00:13:49]The top comment explained the paradox.

[00:13:51]Investors leaving Victoria due to taxes means fewer rental properties, which means higher rents, which means first home buyers can't save a deposit because their rent is too high. The taxes imposed on investors are ultimately being paid by renters. Everyone loses.

[00:14:09]An ABC News documented the human cost.

[00:14:12]In November 2025, a Victorian couple received a land tax bill based on a property valuation the SRO itself had set. A valuation the couple disputed as being inflated above the actual market price. They were being taxed on wealth they didn't have. The bill arrived. The dispute process began.

[00:14:35]>> Emily and David Gidley run a small towing company. They bought the land in 2020 for $440,000.

[00:14:43]In January, they were shocked to receive a $32,000 land tax bill after the property was valued at more than $2 million.

[00:14:51]>> There's no rhyme or reason or quantification as to what's going on.

[00:14:55]>> This wasn't the first time the property had been overvalued. Last year, they received a land tax bill of $20,000 after it was valued at $1.6 million. All you can do is put in an objection.

[00:15:09]>> But in Victoria, you pay first and argue later. That is the system. To be fair, the Victorian government argues the co debt levy is a necessary measure to repay pandemic era borrowings.

[00:15:25]Borrowings that funded health care, business support, and economic stimulus.

[00:15:31]That's a real argument. and some of the 130 plus rental reforms passed in Victoria since 2018, including minimum standards, safety checks, and mold obligations, are individually reasonable protections for tenants. But the cumulative effect of every tax, every levy, every compliance cost stacked on top of each other across 10 years has fundamentally changed the financial equation for any Victorian property holder. The cost gap with Queensland isn't shrinking, it's growing every budget. Here's the stat I've been holding back. The ABS confirmed in its most recent population data that Melbourne recorded a net interstate migration loss. Families are physically leaving the state. Over 5 years, Queensland gained more than 150,000 net interstate arrivals, many from Victoria.

[00:16:31]ABS data for the September 2025 quarter alone showed Victoria losing 4,630 people through net interstate migration.

[00:16:42]They're not going on holiday. They're going to Brisbane, the Gold Coast and the Sunshine Coast and taking their deposits, their income, their spending and their future property purchases with them. that people are leaving this state uh or encouraging their children to go and work interstate because they know that they're never going to be able to get into the property market. There's no hope. They're getting into planes and they're leaving. But it's causing distress. It it's it's destroying families. It's it's it's breaking the whole fabric of society. They're moving to places they don't want to go. They're leaving home.

[00:17:17]>> And the Victorian Treasury knows it. The 2025 to 26 budget update shows Melbourne's falling property values are threatening to blow a hole in stamp duty and land tax revenue, creating a fiscal doom loop where falling prices mean less tax revenue, which means the government may need to raise other taxes to compensate. So, how does Victoria compare to the rest of Australia and the world? Demographia's 2025 international housing affordability report ranks Melbourne at 9.7 times median income, the ninth most unaffordable city on Earth. Brisbane, by comparison, sits lower on the same list despite surging prices because Brisbane's income to price ratio hasn't been compounded by the same tax burden on top.

[00:18:13]Timeout Melbourne ran the demograph finding under the headline Melbourne named the ninth most unaffordable city in the world to buy a home above London above most of the United States above most of the United Kingdom and internationally Australia is now an outlier in how heavily it taxes property holders at the state level. The OECD's 2025 economic survey of Canada, a country with its own severe housing crisis, notes that Canada's approach has focused on supply side reforms, allowing higher density, expediting permits, reducing barriers to building. Victoria did the opposite. Victoria increased barriers to holding property, layering land tax, COVID levy, G AIC, VR LT, and 130 rental reforms on top of each other, while supply collapsed. The OECD recommends what Canada is doing.

[00:19:16]Victoria is doing the opposite. And New Zealand, the country most structurally similar to Australia, has seen housing affordability actually improve in 2025.

[00:19:29]The NZ Ministry of Housing confirmed improvements in some regions, while Melbourne's affordability continued to deteriorate.

[00:19:37]New Zealand has no equivalent to Victoria's CO debt levy. Same part of the world, different policy, different outcome. Propt tracks home price index confirms the capital growth gap.

[00:19:51]Brisbane property values have grown significantly faster than Melbourne through 2024 and 2025 with Melbourne being one of the only major Australian cities to record price falls.

[00:20:04]Victoria has topped the nation as the highest taxing state or territory. On average, re residents are charged more than $5,600 a year compared to 5,400 in New South Wales and the ACT. The Andrews government and councils pocketed an extra $7 billion last financial year in land tax, stamp duty, rates, and other charges. A Melbourne investor is paying the highest taxes in the country on an asset that is falling in value, while a Brisbane investor is paying some of the lowest taxes on an asset that is rising.

[00:20:42]That is the $200,000 gap in action. And a poster on R/henry in October 2025 produced a detailed family of four cost breakdown for Melbourne line by line.

[00:20:55]council rates, insurance, utilities, land tax sir charges, GAIC on new builds and noted that several of those line items simply don't exist for a comparable Brisbane family. The combined gap over a decade of home ownership is the evidence base for the $200,000 figure your documentary title references.

[00:21:20]and Elite Agent, one of Australia's most widely read real estate industry publications, confirmed in February 2026, Victoria's property tax reliance is the highest in Australia.

[00:21:35]Not an activist claim, not a lobby group stat, a finding confirmed by the state's own parliamentary budget office. Macro business senior economist Leith Van Onselin went further in June 2025 with a headline that said it all. Victorian government taxes economy into oblivion.

[00:21:58]Screenshot that headline and put it next to the PBO data. The government's own analysis and Australia's most prominent independent economist agree. Victoria is the most heavily taxed property state in the country and the families are leaving because of it.

[00:22:17]>> There's no land tax on second properties in Queensland. So what Victorian property investors are going to simply do is get rid of the property they have in Victoria and invest in Queensland.

[00:22:28]400,000 extra Victorians are now going to be charged land tax after the last state budget added a total of 860,000 Victorians are now going to be affected by this.

[00:22:39]>> So what happens next? Three scenarios.

[00:22:43]Best case, the Victorian government reverses the land tax threshold to a level closer to New South Wales and Queensland, phases out the co debt levy ahead of 2033, and removes or reduces the GIC on new housing to stimulate supply. Investor sentiment stabilizes.

[00:23:04]Melbourne property values recover. The interstate exodus slows, but this requires the state to find replacement revenue in a budget already running structural deficits, a narrow political path. Realistic case, and this is where most of the data points, the land tax threshold stays at $50,000.

[00:23:25]The CO levy runs its full 10-year course to 2033, and the GIC remains embedded in new home prices.

[00:23:34]Victorian property values continue to underperform Brisbane, Perth, and Adelaide. The investor exodus continues at 15 to 20% annual sale rates. The rental vacancy rate stays below 2%. And the $200,000 cumulative cost gap between Melbourne and Brisbane grows by $10,000 to $15,000 every year. Families continue leaving at a rate of 4,000 to 5,000 per quarter. Worst case, Melbourne's falling property values trigger the doom loop.

[00:24:07]Less stamp duty revenue means a larger budget deficit. The government raises other taxes, potentially expanding the fire services levy, increasing the VRLT, or introducing new charges to fill the gap. Each new tax drives more investors and families out. The revenue hole gets deeper. Victoria's credit rating is downgraded as the IPA warned. Borrowing costs rise and the cost gap with Queensland widens past $250,000 over 20 years. Absolutely cooked.

[00:24:43]>> They want to put extra taxes on housing.

[00:24:45]>> Take an investment property bought in 2015 for $1 million, sold a decade later for $1.75 million or $750,000 more. Under current rules, the investor is taxed on half the capital gain or $375,000.

[00:25:02]So, what does this mean for you?

[00:25:04]Depending on where you sit, if you own a home in Melbourne, run the full annual cost stack, land tax plus co levy plus council rates plus insurance plus body corporate, and compare it to what you'd pay on an equivalent property in Brisbane or Adelaide. The premium real estate Australia comparison tool shows the exact gap at every price point. If you're thinking about buying in Melbourne, factor in the GIC if you're buying new, the land tax threshold if you're investing, and the COVID levy if you're holding through to 2033.

[00:25:42]These are costs that don't appear on the listing page, but will appear on your annual bills for decades. If you're an investor looking at Victoria versus Queensland, the land tax threshold gap of $50,000 versus $600,000 is the single most important number in your spreadsheet. And it compounds every year. And if you're a renter, every tax the government puts on investors is a cost that gets passed through to you in higher rent.

[00:26:14]The families who pay the land tax and the families who pay the rent are both paying for Victoria's debt. Nobody escapes. Here's the truth. The Victorian Parliamentary Budget Office confirms Victoria collects the highest proportion of state revenue from property taxes of any Australian state. The IPA confirms Victoria has the highest subnational government debt in the world at $194 billion and 150,000 Victorians have already voted with their feet by leaving for Queensland.

[00:26:51]>> Clear there's more people moving from Sydney to to Southeast Queensland than from Melbourne to Southeast Queensland.

[00:26:57]Um that is starting to normalize. We're seeing interstate migration in Victoria does look like it's sort of steadying out at about a neutral level. But remember there there are a lot of new taxes for property in in Victoria. You have lower thresholds for land tax. You have vacancy taxes. There's windfall taxes. I'll be covering the suburb by suburb tax comparison, the construction pipeline collapse, and the interstate migration data every week. Subscribe to Aussie Explained so you don't miss the next video. Thanks for watching.