Will Victorian investors exit the property market?

South East Queensland has always seen buyers enter the market from the Southern states, particularly when the property prices start to increase in Sydney and Melbourne. There’s now more reasons for our Southern friends to contemplate purchasing property in Queensland with Victoria now boasting the highest property tax in the country.

From January, 860,000 landlords and holiday home owners in Victoria will be slugged an average of $1,300 extra in land tax and the average property tax revenue that the Victorian State Government is forecast to receive is $2,120 per person. NSW is following closely behind with $1,646 whilst Queenslanders will be set to pay $1,343.

Whilst the Queensland State Government did propose a tax which would see Queensland property owners being slugged with a proportion of Queensland land tax based on all their Australian based landholdings this was quickly quashed as a terrible idea and has since been abandoned. Not before some investors exited the Queensland market at the time.

As if the additonal tax wasn’t bad enough for Victorian investors there’s now talk of landlords in Victoria not being able to lift rents within a 2 year period. The Government are hurting most investors where it hurts the most, the hip pocket.

The intent was to ease the rental price hikes, but sadly, this is more than likely going to see a sell off of rental properties in Victoria which will ultimately hurt the renters most. Those investors will likely look to re-invest those funds in property outside of Victoria and New South Wales which will see Queensland be a great option for them.

At a time where property is in such an under supply compared to the demand, both in rental properties and properties for sale, the State Governments need to be looking at policies that support investors, builders and developers rather than hurting those they are setting out to protect.