Land tax has become a convenient villain.
The word alone is enough to make investors blacklist an entire state. Deals get rejected before they're modelled. Conversations end before numbers are run.
That reaction feels rational. It isn't.
The common belief is that Victorian land tax makes the state uninvestable. But serious portfolios don't avoid costs. They understand them.
Where the filter breaks is not in the policy itself. It's in how investors are applying it without modelling the actual numbers.
Take two regional houses at a $700,000 price point. One in Victoria at a conservative 4.25 percent yield, with land tax applying. One in Townsville, where yields that once sat above 6 percent have compressed to between 4.25 and 4.75 percent in most pockets today, with no land tax in personal name.
That yield compression is the part most investors haven't updated their thinking on. The original case for accepting Townsville's higher holding costs was built on a yield premium that has largely closed.
At a $700,000 purchase, 80 percent LVR, and 6.5 percent interest rate, here is the holding cost comparison at a conservative 4.25 percent yield across both markets.
Victoria: $348 per week. Queensland: $363 per week.
Queensland costs $15 per week more to hold than Victoria at the same yield. The full land tax figure is already inside the Victorian number.
The Victorian land tax figure used is $1,500 per year, based on a $350,000 site value entered into the SRO Victoria land tax calculator for 2026, non-absentee individual owner. You can run your own figure at sro.vic.gov.au/owning-property/land-tax/land-tax-calculator. The actual amount will vary by council-assessed site value and total Victorian land holdings. Land tax on a rental property is generally treated as a deductible expense. Confirm the position for your specific situation with your accountant.