On 20 May 2025, the Victorian State Government announced the Victorian State Budget for 2025-2026. While no new taxes were announced, previously announced tax increases have been confirmed – including increases to the congestion/car parking levy and the Emergency Services and Volunteers Fund levy.
The main changes (subject to legislation) include an:
extension of the off-the-plan stamp duty concession to October 2026;
increase in the congestion/car parking levy from 1 January 2026; and
introduction of the new Emergency Services and Volunteer Fund levy.
Expansion of off-the-plan land stamp duty concession to October 2026
Up until 2017, the off-the-plan concession allowed for reduction in the duty payable for properties bought during construction. From 2017, the Government restricted this to first home buyers (up to $750,000) and buyers of principal places of residence (up to $550,000).
On 21 October 2024, the Victorian Government announced for one year (i.e. to 21 October 2025 ) that the off-the-plan concession would once again be open to all purchasers and there was no requirement that the property be used as a principal place of residence. Under the State Budget, this expanded off-the-plan concession has been extended to 21 October 2026.
Increase in the congestion levy/car parking levy from 1 January 2026
The Victorian Government previously announced the increase to the congestion levy on 13 December 2024. This levy is payable annually on car parking spaces in the Melbourne CBD and surrounding suburbs.
From 1 January 2026, the levy will increase from $1,750 per car park to $3,030 (in the Category 1 levy area) and from $1,240 to $2,150 in the surrounding Category 2 area.
The levy area will also expand, to include all of Richmond and Abbotsford in the East and South along St Kilda Road.
An exemption will be legislated for parking spaces on government school premises that are provided without charge (although apparently not including private schools).
New Emergency Services and Volunteer Fund Levy from 1 July 2025
The legislation to implement this replacement tax passed through State Parliament last week.
This is a replacement for the fire services property levy, but at much higher rates. This tax will be charged to taxpayers through local government rates notices.
The new levy is calculated based on a fixed rate that varies by property type based on a property’s capital improved value (i.e. the rates value).
Key takeaways
The main focus on the Budget coverage will be on the overall tax position, State debt and infrastructure purposes. While the Budget does little to change the overall tax position, the property tax burden through recently introduced foreign surcharges, land tax surcharges, windfall gains tax, commercial and industrial property tax and vacant residential land tax will continue to be felt by many taxpayers.
As with all property taxes, taxpayers should pay particular attention to their land valuations (both site value and capital improved value) and object where these differ from expected market values.
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Please contact us with any questions on the Victorian State Budget 2025-2026 or any other State Tax issues.
