This month on Market Watch, Debra and Scott covered their usual insightful review of the Australian property market, including recent market trends across major cities. The episode also includes a revealing look at Land Tax and the impact it’s having on Victorian property prices.
To help cover the specialist area of Land Tax, Deb and Scott were joined by Brandon Perry from Devoir Accounting to clarify what property investors and homeowners need to know.
Market Performance Overview
Looking at market performance data from the three main data houses – CoreLogic, SQM Research, and PropTrack it was clear the RBA announcement on 18 February to drop the cash rate had a positive impact on the market.
The price declines of the last three months – albeit very small – definitely reversed with most main areas experiencing an upturn in prices.
Buyer Sentiment: Are Investors Returning?
Scott noted an increase in buyer inquiries across multiple states. While some investors remain cautious, others are entering the market believing interest rates have peaked. However, the reality is that borrowing capacity remains a limiting factor for many so it’s more of a change in sentiment rather than buyers having an ability to access more funds.
Another factor impacting buyer sentiment this month is global market uncertainty, especially due to economic turbulence influenced by international events such as U.S. politics. As Deb noted, historically, when share markets become volatile, property and gold markets strengthen as investors seek stability.
The Growing Impact of Land Tax
A key issue affecting the property market—particularly in Victoria—is land tax. Brandon Perry from Devoir Accounting provided an overview of this topic and how it’s shaping investor behaviour.
What Is Land Tax?
Land tax is an annual state-based tax on the unimproved value of land owned by investors – ‘unimproved’ value means the value of the land without including the value of any dwellings on the land. While primary residences are exempt, investment properties are subject to this tax, which varies by state.
Each State and Territory in Australia has different rules and valuation thresholds – click here for an overview of land tax in each State and Territory.
One of the major factors influencing property pricing over the past 12 months is the extensive increase in land tax imposed by the Victorian State Government.
Brandon highlighted that recent changes in Victoria have dramatically increased land tax costs, leading to investor withdrawals, forced sales, and a significant price drop in the market. In fact, as Deb pointed out, it is now more expensive to buy in Brisbane than in most parts of Victoria due to these policy changes.
Strategies to Manage Land Tax
- Spread Investments Across Multiple States – Since land tax is assessed separately in each state, diversifying property holdings can help avoid exceeding individual state thresholds.
- Utilize Different Ownership Structures – Some investors use discretionary trusts, family trusts, or self-managed super funds to manage tax exposure. However, each has different tax implications, so professional advice is critical.
- Consider Units Instead of Houses – Land tax applies to the land component of a property. Since apartment units share land, their individual land tax burden is often lower.
- Check Land Valuation Regularly – Investors should review their council rates notices or use property valuation portals to track land value changes and potential tax liabilities.
Land Tax Registration & Compliance
Brandon warns against failing to register for land tax:
“If you don’t register, the government will eventually catch up. I’ve seen cases where clients suddenly face five years’ worth of backdated land tax bills.”
He advises all investors to proactively check and register to avoid unexpected financial shocks. With land tax impacting investment decisions and market trends evolving, buyers must stay informed.
Deb also pointed out that her team has always checked land values and potential tax implications as part of due diligence before making clients’ property purchases.
“We have always checked land values and potential tax, but it’s something most buyers don’t think about. It’s more important than ever before to consider this factor while you’re deciding where to buy as it can be a very expensive mistake that might make it challenging to retain a property. Remember land values are cumulative – so one property might not tip you into the tax, but owning more than one could mean you’ll be paying a large annual invoice that increases every year.”
Key Takeaways for Property Buyers & Investors:
✅ Check land tax implications before purchasing.
✅ Assess market trends across multiple states.
✅ Get tailored advice from a property strategist and accountant.
✅ Stay ahead by subscribing for regular market updates.
If you’d like to speak with Brandon Perry about tax strategies or need expert guidance from Scott or Deb, their contact details are in the description box of the podcast link.
Until next time, stay informed, stay strategic, and make smart property decisions!
About the author
Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline. She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics. She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.
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Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.
