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For: Melbourne property investors

How does Victoria land tax work for an investment property in 2025?

Investing For Investors Melbourne Refreshed 2026-06-04
The short answer

Victoria charges land tax annually on the unimproved site value of each non-PPR property you own, summed across your portfolio. The 2024 budget added a flat "COVID Debt Levy" surcharge that reaches investors with land holdings above A$50k. Owner-occupied homes are exempt. Verify your exact bill with the SRO.

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The full answer

Land tax in Victoria is an annual state-government charge on the site value (land only, not buildings) of property you own at midnight 31 December. Your principal place of residence (PPR) is exempt; investment, holiday, and vacant land is taxable.

The tax is calculated on the aggregated site value across your Victorian portfolio — not on each property separately. A A$400k investor land holding in Frankston, a A$300k investor land holding in Geelong, and a A$200k holiday block at Phillip Island all sum to A$900k of taxable land for one entity, then taxed against the schedule.

Indicative 2025 rates (general land tax): A$50k–A$100k = A$500 base + 0.2% of value above A$50k; A$100k–A$300k progressive scale; A$300k–A$600k progressive; A$600k+ moves into higher tiers. The 2024 Victorian Budget introduced a temporary "COVID Debt Levy" surcharge that pushed thresholds DOWN — investors with combined holdings as low as A$50k now pay land tax. Confirm the current schedule on sro.vic.gov.au.

Practical implications for Melbourne investors: a typical A$650k Tarneit investment property has unimproved site value around A$280k; combine with another investment property at similar site value and you cross multiple thresholds. The annual bill can run A$1,500–A$5,000 per year depending on portfolio size — meaningful enough to model into yield calculations before purchase.

Trusts and corporations face higher rates and lower thresholds than individuals. If you're holding investment property through a trust structure, get an accountant view before assuming individual rates apply.

What we don't claim: that land tax is the same year over year. Both the schedule and surcharges have shifted multiple times since 2020. Hyperlocal's investor lens factors current land tax into the yield commentary on each suburb but does not project future schedules. Always verify with the SRO or your accountant for personal calculations.

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