Why Aussies are about to be slugged with higher rents – after annoying tax was increased by more than 250 per cent

Victorian landlords are being pressured to both promote their properties or hike hire after land tax skyrocketed – with one going through a 258 per cent improve to their invoice.

Owners are being hit with crippling payments after the state authorities raised land taxes in 2023 to recoup $1billion value of debt incurred through the Covid pandemic.

Property homeowners are feeling the brunt because the rise in land tax coincides with a sequence of rate of interest hikes by the Reserve Financial institution of Australia, which has seen the money charge rise to a 12-year excessive of 4.35 per cent in a bid to tame hovering inflation. 

About 380,000 properties might be answerable for the tax after the land worth threshold decreased from $300,000 to $50,000.

A flat charge Covid levy was additionally launched and locked in for 10 years, with a parcel of land value $50,000 to $100,000 incurring a $500 levy whereas land value greater than $100,000 could be hit with a $975 mounted cost. 

Rising rates of interest and hovering land tax payments are a significant factor in prompting funding property homeowners to promote up.  

The variety of ex-rental houses listed on the true property market jumped by 30 per cent in a 12 months, knowledge from actual property analytics firm Suburbtrends discovered.  

Virtually 12,000 ex-rental properties have been put in the marketplace throughout the nation within the 12 months to January – accounting for 18 per cent of all listings. 

Funding property proprietor Andrew Robertson mentioned his household was hit with an ‘outrageous’ 258 per cent improve on their  land tax invoice. 

The property, a seashore shack situated in Security Seaside, has been in his spouse’s household for the reason that Forties.

Since 2021, the land tax on the vacation house elevated from $12,000 to a whopping $43,000.  

‘We inherited a couple of years in the past and the entire household makes use of it. We don’t hire it out,’ Mr Robertson instructed The Herald Solar.

‘It is outrageous. Nobody can finances for a couple of hundred per cent in elevated prices in a couple of years. The irony is that we have been those on lockdown and now we’re paying for it once more.’

One funding property proprietor mentioned the land tax invoice on a household vacation house had elevated by a whopping 258 per cent from $12,000 to $43,000

One other aged landlord who owns a property in regional Victoria mentioned he saved rents low to assist help his single-mum tenant however now has no alternative however to extend the hire and doubtlessly evict the renter resulting from his crippling land tax invoice.

In Could final 12 months, Victorian Treasurer Tim Pallas handed down his ninth State Funds, centered predominantly on repairing authorities debt. 

Three key measures, which commenced on January 1, resulted in important improve to land tax income. 

The measures included a discount of the tax-free threshold, the introduction of a hard and fast cost and improve to the speed for sure landowners. 

The Andrews Authorities defined the measures – together with the levy, land tax and payroll tax – have been  ‘non permanent and focused’ and can apply for a interval of 10 years till June 30, 2023.