MEDIA RELEASE
The Real Estate Institute of Victoria (REIV) is calling on the next Victorian Government to review its reliance on stamp duty revenue, warning that a more subdued property market and rising interest rates are exposing the risks of relying so heavily on property transactions to fund essential services.
The latest budget update has highlighted the vulnerability of Victoria's revenue base, with forecast land transfer duty (stamp duty) revenue reduced by $800 million this financial year in the latest State budget update.
With further pressure on borrowing capacity and property market activity, the next Government must review its current reliance on property taxation and provide a sufficiently stable and sustainable foundation for the State's finances.
The REIV's 2026 - 27 Budget submission, highlights the extent of Victoria's reliance on property taxation. In 2024 - 25, land transfer duty and land tax together accounted for approximately 42.4 per cent of the State's own-source tax revenue, the second-highest proportion of any Australian state. Further, the recent Victorian Auditor-General’s report on the Annual Financial Report (pg 59), stressed the risks of current Victorian tax revenue being so highly concentrated on property taxes and payroll tax, “Around 70 per cent of the state’s taxation revenue comes from property and payroll related taxes. Revenue from these taxes depends on higher property values, transaction volumes, wage growth and higher employment. These revenue sources are therefore sensitive to weaker economic conditions”.
REIV CEO Toby Balazs said the latest revenue downgrade reinforced the need for the next Government to critically examine its reliance on property taxation and consider a more sustainable approach to revenue and investment.
“Stamp duty is inherently tied to property market activity. When transactions decline, so does the revenue the Government relies on to fund essential services. That volatility presents a significant challenge when the State is also managing substantial debt obligations.
“Victoria has become increasingly reliant on property taxation, while simultaneously making the state a less attractive place to invest. The cumulative impact of higher taxes and regulatory costs is undermining investor confidence and contributing to the decline in rental investment.
“The next Government must recognise that a sustainable property market is in the interests of all Victorians. We need a tax system that encourages investment and supports housing supply.”