Key Highlights

  • Both promise to restore the general land tax threshold to $300,000.
  • The current threshold is $50,000.
  • Labor's proposed timetable reaches the threshold in 2033–34.
  • The Coalition's proposed timetable reaches it in 2031–32, two years earlier.

Victoria's two major parties now agree that the general land tax threshold should return to $300,000. What they disagree on is how long property owners should wait. With the state election just over two weeks away on 28 November, Labor's plan gets there by the end of 2033–34, while the Coalition promises the same end point two years earlier, in 2031–32. For investors holding modest land parcels, that gap could mean several extra land tax bills.

How Victoria's threshold fell to $50,000

For years, Victorian landholders did not pay general land tax unless the total taxable value of their land reached $300,000. Land used as a principal place of residence is generally exempt, so the tax mostly falls on investors, holiday-home owners and businesses holding land.

That changed with the state's COVID-era Debt measures, which cut the threshold in stages to its current level of $50,000. The change pulled a large number of smaller investors into the land tax net for the first time.

Restoring the old threshold has become one of the more concrete tax contests of the campaign. Both major parties have now committed to the $300,000 figure, so the real choice for voters is about timing and funding.

Labor's plan: $25,000 a year, then a longer runway

Premier Ben Carroll announced Labor's policy on 4 October. The threshold would rise by $25,000 a year from 2027–28. It would reach $150,000 by 2030–31 and $300,000 by the end of 2033–34.

Labor puts the cost at $230 million over five years. The savings identified to pay for it include fleet consolidation ($70 million), delayed level crossing removals ($798 million) and cuts to public service executive roles (more than $100 million).

The published milestones say something about the shape of the schedule. Four annual steps of $25,000 take the threshold from $50,000 to $150,000 by 2030–31. Reaching $300,000 three years later would need a further $150,000, an average of $50,000 a year over that final stretch. How Labor would phase those later years has not been set out in detail.

The Coalition's plan: $50,000 a year to 2031–32

Opposition Leader Jess Wilson's Coalition would lift the threshold by $50,000 a year until it reaches $300,000 by 2031–32. The Opposition says more than 250,000 Victorians would benefit.

On simple arithmetic, five steps of $50,000 take the threshold from $50,000 to $300,000. That fits a first increase in 2027–28, although voters will want to check the exact start year and Full Costing in the Coalition's pre-election documents.

The minor parties are also in the race. One Nation's Warren Pickering said in September that he would roll back the windfall gains tax and land taxes and restore the $300,000 threshold. The Liberals' David Southwick also said the Coalition would scrap Labor's target for 70% of new homes to be built in established areas.

All three plans are election promises. None is law, and any change would need legislation after the election.

Hypothetical example: what two years could mean for one investor

Hypothetical example: Mei owns one Investment unit in Melbourne. Its land has a taxable value of $260,000, and the value does not change. She owns no other taxable land.

Under the Coalition's schedule, the threshold would be $250,000 in 2030–31, so Mei would still be above it that year. In 2031–32 it would reach $300,000, and her land would fall below the threshold.

Under Labor's schedule, the threshold would be $150,000 in 2030–31. Mei's $260,000 land value would remain above it until the threshold passes $260,000 at some point before the end of 2033–34. On the published milestones, that could mean up to two more years of land tax than under the Coalition's plan.

The dollar amount of each bill would depend on the rates and charges that apply in each year, which neither party has fully detailed. Rising or falling land values would also change the outcome. The example only shows how timing alone could affect someone near the threshold.

Property's 47% share of Victoria's tax take, in a softer market

Property is central to Victoria's Revenue base. The Property Council of Australia's election platform says property provides 47% of the Victorian Government's annual tax revenue, rising to 48% by 2028–29 on Budget forecasts.

The Council's platform also targets other property taxes. It says the windfall gains tax raised $15 million in 2024–25 and claims that removing it would add $1.4 billion a year in investment, about 3,100 homes and 2,700 jobs a year.

Builders have welcomed the land tax pledges while asking for more. Keith Ryan of HIA Victoria said in October: "Lifting the threshold will help restore some confidence and reduce cost pressures."

The debate is taking place in a weaker property market. The Reserve Bank's November Statement on Monetary Policy says national housing prices were 4.7% below their recent peak in September. It attributes the fall since the March peak mainly to monetary policy and tax changes in the federal Budget.

Victoria also has new rules on reserve price transparency for auctions, which Consumer Affairs Victoria says started on 1 October. Its taskforce reports monitoring more than 3,330 campaigns since it began, and issuing more than 420 written warnings and 260 infringement notices totalling more than $3 million.

For investors weighing whether to keep or sell land-heavy holdings, the land tax timetable is one input among many. Federal changes to negative gearing and Capital Gains Tax from 1 July 2027 will also shape decisions.

What to watch

The Victorian election is on Saturday 28 November 2026. Both major parties are expected to publish costings before then, which should clarify how each schedule would be phased and funded.

If either plan goes ahead, the first threshold increase would most likely apply from 2027–28. That is also when the federal CGT and negative gearing changes start, on 1 July 2027.

Federally, the Senate Economics Legislation Committee reports on Tax Reform No. 3 on 13 November. The Mid-Year Economic and Fiscal Outlook is due in December.

Landholders near the threshold may find it useful to check their latest land tax assessment and their land's taxable value, so they can see where they would sit under each schedule.