Victorian property taxes are about to spike.
Starting July 1, homeowners and investors in the southeastern Australian state will see property taxes surge thanks to the Emergency Services and Volunteer Fund (ESVF), which passed Parliament last week.
The new levy will apply to all residential, commercial, industrial, and agricultural landowners across Victoria, adding in some cases between 100% to 150% of additional tax fees. In the case of a homeowner with a property valued at $1 million, that could mean an additional $10,000 tacked on each year.
"It's crazy how much the tax is actually going up," Belinda Raso, a registered tax agent at Tax Invest Accounting, told Australian Broker. "The rates are going to double. It's pretty harsh."
Raso noted that the state's substantial debt burden is likely a driving force behind the introduction of the new legislation.
"Basically, the government expanded the tax and said, 'Guess what, farmers? Guess what, homeowners? To get the state the most bang for its buck, we're hitting ratepayers throughout the state,;" she said.
The Victorian government first introduced the proposed tax changes last December as part of a broader strategy to address the state’s mounting debt – among the highest in the nation.
In fact, Victoria's debt has grown to more than $167 billion, with projections suggesting it could reach as high as $194 billion by 2028. New South Wales' debt, by comparison, while still substantial, hovered around $93 billion for the 2024 fiscal year.
Meanwhile, the Victorian government collected $600 million in tax revenue last year.
"Now the government is hoping to collect $1.6 billion this year. It's really going to hurt homeowners in the state," Raso said.
Under the changes, both residential and non-residential principal place of residence (PPR) property charges will rise from 8.7 cents to 17.3 cents for every $1,000 of property value — an increase of approximately 99%. Property valuations are determined by the Victorian government.
Commercial land charges will go from 66.4 cents for every $1,000 of property value to 133 cents – an increase of nearly 100%. Industrial land will see rates jump from 81.1 cents to 133 cents, marking a rise of approximately 64%. For primary production land, or land used by farmers, the levy will increase from 28.7 cents to 71.8 cents per $1,000. That's an uplift of around 150%.
The ESVF is an expansion of the former Fire Services Property Levy (FSPL).
In addition to helping pay down the state of Victoria's massive debt, the added taxes support Victoria’s emergency services, such as fire brigades, volunteer services and other disaster response agencies.
The FSPL funded several government agencies, including the Fire Recovery Victoria, the Country Fire Authority (CFA) and Fire Rescue Victoria. The updated version will also include the Triple Zero Victoria, the State Control Centre, Emergency Management Victoria, and Forest Fire Management Victoria.
The ESVF is calculated by a fixed charge, which varies by property type, as well as a variable charge based on property value.
Starting in July, the government will offer ESVF rebates to CFA and Victoria State Emergency Service (VICSES) volunteers and life members on their principal place of residence or farm.
Raso said farmers who volunteer can get a rebate, but property values are capped at $5 million. "And it's only a rebate of $3,865," she said. Raso added that $26 million in rebates are budgeted for the 2026 financial year.
For homeowners, the increased ESVF levy means higher annual property-related expenses. This additional financial strain could affect borrowers' ability to service existing mortgages or qualify for new loans. As a consequence, lenders may adjust their assessments of borrowing capacity to account for the increased tax obligations, potentially reducing the amount homeowners can borrow.
Aside from moving, Raso said property owners in Victoria should contact their local governments.
"People have to stand up to what's happening," she said. "They've got to contact their local councils. They've got to contact their local MP and say, 'Look, we don't want this.' They've got to band together to formally oppose this. If people do stand up, and the more that they make their voice heard, it may be something that the government might scrap."
