A new report commissioned by the Urban Development Institute of Australia (UDIA) has reiterated the harm that Labor's excessive taxes have on Victoria's property market – making home ownership and renting even more unaffordable.
Since 2014, Labor have introduced 55 new and increased taxes, many of these hitting the property sector. The 2024-2025 State Budget confirmed that the Victorian Government is on track to collect $21.5 billion in annual revenue from Victorian property taxes alone - almost half the state's tax take.
According to the UDIA, Labor's excessive taxation has dampened development activity in Victoria's housing market, making it more expensive and difficult to buy a home in Victoria. Labor's policies have also stalled rental supply at a time of growing demand, with the UDIA calling out Melbourne's historically low rental vacancy rate of 1.3 per cent.
The report identifies Labor's Vacant Residential Land Tax, Windfall Gains Tax, foreign surcharges, and removal of off-the-plan stamp duty concessions as key contributors to Victoria's housing pressures. According to the UDIA, the Labor Government's scrapping of off-the-plan stamp duty concessions in 2017, which aimed to make housing more affordable, instead contributed to a 33 per cent decrease in apartment sales, creating a $924 million fall in state revenue the following year.
Unless Labor implements urgent tax reform, the UDIA warns that Victoria's development of new apartments in 2022-2027 will only amount to half of the supply produced in 2016-2021.
Shadow Treasurer, Brad Rowswell, said: "Labor needs to stop treating those who seek to invest in Victoria as their personal ATM. These excessive taxes on the property industry are driving development away – pushing up housing costs for all Victorians.
"Higher house prices and weekly rents are the clear consequences of Labor's financial mismanagement. You can't tax your way to more affordable homes."
Shadow Minister for Planning, James Newbury, said: "The Allan Labor Government's damaging policies have hurt the property sector and caused the industry to go backwards.
"With 29 of the 55 taxes Labor has introduced during their time in office being property based, there is little wonder the housing sector is going backwards and those who dream of owning a home suffer."
Shadow Minister for Housing Affordability and Home Ownership, Evan Mulholland, said: "This report shows that Victoria's apartment pipeline has fallen off a cliff with Labor's new taxes halving Victoria's supply of apartments. It's time for Jacinta Allan to urgently reform our tax system to address Labor's housing affordability crisis.
"Labor cannot manage money, cannot manage housing and Victorians are paying the price."
