The Covid Debt Levy #landtax was to raise north of $5.65bn by the end of this financial year. Department of Treasury and Finance, Victoria have it landing nearer $4.67bn, a $984m shortfall.
The first year collected $1.19bn against a $1.357bn budget. Hundreds of millions short every year since.
Forward estimates never climb past $1.4bn in a single year, with the final year landing at $1.38bn.
The mechanism was entirely predictable: a tax targeting a landlord population that has been leaving since the day it was announced.
📉Active rental bonds fell for 8 straight quarters since September 2023, down to 657,002 from 671,109. That is 14,107 rental homes lost from the market.
Updated bond data from Victorian Department of Families, Fairness & Housing is delayed over 6 months because they know the numbers released will be terrible.
🤔In June 2025 I predicted the long term result would be less rental supply, and less tax from investors. The state’s own numbers now quantify that loss as nearly $1bn, so far.
Fewer landlords, fewer assessments, less revenue: a tax consuming its own base.
Investors exiting may allow a few owner-occupiers in, but it leaves fewer rental homes today and less #housingsupply tomorrow.
With the Victorian state election approaching, both sides of politics now promise to lift the threshold back up.
Victorian Labor promises to lift the floor by $25,000 a year to $300,000 by 2034. Liberal Party of Australia (Victorian Division) proposes $50,000 a year, normalised by FY2032.
Moving the threshold back slowly will not bring #investors back fast.
A divested rental returns when yield and policy stability return, not when the tax floor slowly edges up.
But our obscene state debt makes it difficult to do more. Chicken meet egg. 🐔🥚
The losers:
⛔ Renters: paying higher rents with fewer homes to choose from.
⛔ The state budget: deteriorating further as the asset base contracts.
⛔ Capital confidence: anyone who once believed in investing in Victoria.
This is what happens when #taxreform is treated as a free extraction tool with no consequential impacts.
🤔The message is simple: You cannot collect tax from landlords who have left.
Just like you can’t punish businesses, developers and investors whilst also creating economic confidence and delivering a healthy bottom line.