On 20 May 2025, Treasurer Jaclyn Symes handed down the Victorian State Budget 2025-26. While no new taxes have been announced, there is no relief in sight for landowners in respect of the various taxes currently in place. These include transfer duty, land tax, vacant residential land tax, foreign purchaser additional duty, absentee owner surcharge, and windfall gains tax.
The revenue measures announced in the Budget are as follows:
- extension of the off-the-plan stamp duty concession to 20 October 2026;
- increase in the congestion levy from 1 January 2026; and
- introduction of the Emergency Services and Volunteers Fund levy from 1 July 2025.
The latter two measures were previously announced in the 2024-25 Budget Update, released by the former Treasurer on 13 December 2024. These previously announced tax increases have now been confirmed.
Extending the temporary off‑the‑plan stamp duty concession to 20 October 2026
The Treasurer has announced that the temporary land transfer duty concession for off-the-plan apartments, townhouses, and units that was announced on 21 October 2024 will be extended for 12 months. The concession will now apply to contracts signed on or after 21 October 2024, and before 21 October 2026.
Broadly, stamp duty is payable on the ‘dutiable value’ of property (being the purchase price under a sale contract or the market value of the property, whichever is greater).
Under the existing off-the-plan concession, the dutiable value of property is calculated by allowing a deduction of construction costs from the contract price, resulting in a lower dutiable value, which correspondingly reduces the duty payable. To be eligible for the general off-the-plan concession, the purchaser must be eligible for either the principal place of residence (PPR) exemption or the first home buyer duty exemption or concession.
For contracts entered into on or after 21 October 2024 and before 21 October 2025, a temporary off-the-plan concession was introduced for purchasers of dwellings (including apartments and townhouses) within strata subdivisions that have common property. The concession was also extended to investors, companies and trusts, with no requirement to be eligible for either the PPR exemption or the first home buyer duty exemption or concession.
This extended concession, which was due to expire in October 2025, will now be extended for a further 12 months. The concession will now apply to contracts signed on or after 21 October 2024 and before 21 October 2026.
Increase in Congestion Levy from 1 January 2026
On 13 December 2024, as part of the 2024-25 Budget Update, the former Treasurer announced that the Congestion Levy would significantly increase from 1 January 2026, pending Royal Assent of the introducing legislation. This announced increase was intended to bring the levy ‘in line with the expected parking space levy rates in Sydney’s CBD.’
Under the changes:
- the Category 1 rate will increase from $1,750 to $3,030; and
- the Category 2 rate will correspondingly increase from $1,240 to $2,150.
The Category 2 area boundary will also be expanded to include additional inner suburbs along Hoddle Street and Punt Road, to include parts of inner-eastern suburbs such as South Yarra and Richmond.
The purpose of the Congestion Levy is to impose a levy on parking spaces in the central business district and inner Melbourne, to reduce traffic congestion. The levy is intended to act as a financial deterrent to drivers who arrive and leave during commuter peak hours and park in city car parks, with the specific aim of encouraging the use of public transport.
The Congestion Levy is imposed each year in respect of each ‘leviable parking space (being a car park that is not subject to an exemption).
The levy assessment is calculated based on the use of parking spaces in the preceding calendar year. Accordingly, the manner in which an owner uses their car parking spaces during the 2025 calendar year will contribute to their 2026 levy assessment.
The increase in the Congestion Levy has not been legislated. However, given the significant increase in the levy applicable from 1 January 2026, landlords and commercial property agents may need to consider increasing tenants’ outgoings to fund this increased levy, so that the correct amount of the levy is collected during in the 2025 calendar year. We will monitor the status of the introducing legislation and provide you with further updates on this issue.
Emergency Services and Volunteers Fund levy from 1 July 2025
From 1 July 2025, the Emergency Services and Volunteers Fund (ESVF) will replace the Fire Services Property Levy.
The ESVF will support a broader range of emergency services and for the first time include Victoria State Emergency Service (VICSES), Triple Zero Victoria, the State Control Centre, Forest Fire Management Victoria and Emergency Recovery Victoria, as well as the Country Fire Authority (CFA) and Fire Rescue Victoria (FRV).
The ESVF will be calculated based on a fixed charge that varies by property type, and a variable charge based on property value. Pensioners, veterans and single farm enterprises will receive concessions.
Rebate for volunteers
From 1 July 2025, eligible CFA and VICSES volunteers and life members will be entitled to a rebate on the ESVF on their PPR or farm, which will be administered by the State Government through the Department of Government Services.
Eligible volunteers include all active VICSES and CFA operational and support volunteers. To be eligible for the rebate, volunteers will need to have served for at least 12 months, have passed probation, and not be suspended on disciplinary grounds or have taken a leave of absence for the entire duration of the preceding 12 months.
Final comments
Victorian landowners will continue to be impacted by the vast array of property taxes. We have observed an increase in the State Revenue Office’s investigations, particularly in respect of compliance with the vacant residential land tax and absentee owner surcharge. The SRO is empowered to issue amended assessments for the previous five years, which can result in a significant, unexpected tax liability. We can assist you in any investigations conducted by the SRO, and can advise of your objection rights if you have been issued with assessments.
Contact us
If you would like to discuss any state tax issues, including any of the measures announced in the Victorian Budget, please contact our Tax team.
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