Changes in Victoria Property Market in 2024: 8 Major Events are Expected to Happen This Year

As significant government-mandated reforms take effect, real estate professionals in Victoria have cautioned buyers and homeowners that they are in for one of the most complicated years in the history of the state’s housing market.

8 Key Things Set to Hit the Housing Market in Victoria

What is happening to real estate in Victoria? The following eight market changes have already occurred or are about to happen.

January 1, 2024: Land Tax

Affecting properties used for investment, business, and vacation, it will be applied to land worth more than $50,000 starting in 2024 rather than the $300,000 minimum in 2023.

For owners whose land values range from $50,000 to $100,000, this will cost them $500, and from $100,000 to $300,000. If the land value exceeds $300,000, the payment amount will be $975 plus 0.1% of the total land value.

• 860,000 owners are expected to be impacted (380,000 for the first time).
• $1175 is the cost increase on a $500,000 land value.

January 1, 2024: Surcharge for Absentee Owners

The current fee will increase to 4% of the dutiable land value of a property from its current rate of 2%. Only those offshore owners who don’t live in Australia are affected.

• 3,916 transactions are expected to have an impact in the 2022–2023 fiscal year.
• Impact of costs of $11,175 (including increased land taxes) on a $500,000 land value.

January 1, 2024: Gas Substitution

Starting on January 1, gas connections for newly approved homes will be phased out unless they are part of an estate with a planning approval already in place.

Connections for gas bottles are still permitted. At the moment, electric appliances cost more than their gas counterparts. Examples of such equipment are heat pump water heaters and induction cooktops.

• The impact is estimated at 40,000 dwellings.
• The impact on cost is between $2250 and $5300, depending on quality.

May 1, 2024: National Construction Code

Buildings authorised for development after May 1st must meet the Nationwide House Energy Rating System’s seven-star energy efficiency standard (NatHERS). New requirements for liveability will also apply to homes, such as accessibility for Victorians with disabilities.

• The impact is estimated at 50,000 households annually.
• The impact on cost is between $30,000 and $40,000 for a typical new house.

2024: Help To Buy

A co-buying program to assist Australians who are unmarried and make $90,000 or less per year ($120,000 or less for households) but do not own a property. The federal government will contribute up to 30% of the home’s cost (or 40% for new construction) for an equivalent interest in the property, with approved buyers paying a 2% deposit. The maximum amount of the federal subsidy is $850,000 in Victoria’s metropolitan districts and $550,000 in the remaining parts of the state.

• Impact estimated at 40,000 homebuyers nationwide.
• Impact on costs is up to $340,000 off the price of a new home.

Expected in 2024: Extension of the Rental Bidding Ban

Agents and landlords who accept unsolicited rental bids will be subject to fines. This includes a prohibition on soliciting rental bids from renters who offer more than the listed amount.

• Impact expected: more than 624,000 private rentals in Victoria (Census, 2021).
• Penalties are $55,000 for corporations and $11,000 for individuals under the current solicitation laws.

January 1, 2025: Levy on Short-Term Accommodation:

A 7.5% tax on earnings from residences rented out on short-term rental websites. We’ll provide more information as the levy gets closer to its January 1, 2025, debut date.

• The impact is estimated to be 36,000 properties.
• The impact on costs is $750 for each $10,000 in rent.

January 1, 2025: Residential Land Tax for Vacant Spaces

For homes considered empty in inner and middle-ring suburbs of Melbourne, an additional 1% land tax will be applied to the capital enhanced value of the property. All residences in the Victoria area will be covered by it by 2025, unless the owner resides there for at least four weeks of the year or rents it out for at least six months.

• The impact is estimated at 700 dwellings.
• The cost increase on $500,000 in capital gains is $5000.

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