Some landlords in one Australian state say they are tired of being “demonised” and are selling their rental properties, saying it is too expensive to maintain them.
Kitchenware salesman Craig Doyle, 61, and his wife hoped investing their retirement in a property 10 years ago would provide them with a tidy nest egg.
But it wasn’t to be, and the couple, who live in Melbourne’s western suburbs, claim to have lost almost $100,000 and are selling their four investment units.
They are paying more in state tax, council rates, body corporate fees and compliance costs, and the rising costs are pushing them over the edge.
Some landlords in one Australian state say they are tired of being “demonised” and are selling their rental properties, saying it is too expensive to maintain them. In the photo, a stressed elderly couple.
‘People say “you have five houses”, but I don’t, I have five debts. “They are killing me and nullifying my ability to retire,” Mr. Doyle told the Australian financial review.
Doyle said he is selling to get his money back and will put it into superannuation as it is “too expensive” to own investment properties in Victoria.
Each of the Doyles’ units is subject to a huge land tax increase that Victoria introduced to help pay off the state’s huge debt after successive Covid-19 lockdowns.
Landowners have received an average of $1,300 in additional land taxes per property, with family homes exempt.
‘We are the ones who are being demonized. “It’s unfair that the (Victorian) government is taxing my generation,” Mr Doyle said.
‘They are going after people who they perceive have money. But why do we have to pay these taxes to compensate for the poor management of the state government?
Property advisor Nick Menz is also selling his rental property in the Melbourne suburb of Point Cook due to rising land taxes.
“Anyone who owns an extra property in Victoria will be hurt,” he said, adding that investors could get much better returns on their investments in Queensland and Western Australia.
From January 1, there are new fixed charges for second homes and investment properties in Victoria.
An annual flat-rate tax of $500 applies to properties with a land value between $50,000 and $100,000.
The payment rises to $975 for homes valued between $100,000 and $300,000, and an additional 0.1 percent of the land value is applied to properties worth more than $300,000.
When the state budget was announced, the Victorian Labor government predicted that 860,000 Victorians would be affected and 380,000 would pay the tax for the first time.
The average increase in land tax from the tax, which is expected to last 10 years, will be $1,300 on a land valuation of $650,000, which is a vacation or investment property worth about $1.3 millions of dollars.
Prospective tenants appear in a long line to view an open property inspection
A real estate agent in Melbourne’s southwest said more than 100 clients sold their investment properties through his office alone in the past 15 months because they knew higher land taxes were coming, and since they arrived.
The backlash in Victoria came after former Sunrise host David Koch called on Australians to “love their landlords” amid the rental crisis and told frustrated tenants to “direct their anger at the three levels of government”.
In an opinion piece for The Nightly, Koch said landlords have been vilified for raising property rents in Australia, while not enough blame has been placed on the government.
He said the real reason rents are rising is “a combination of rising interest rates, lack of new development due to land shortages, delays in approvals, banks reducing borrowing capacity and developers going to bankruptcy.”
Former Sunrise host David Koch (pictured left) wrote a “love letter” to the owners. Young tenants are pictured on the right.
“Under Labor, life continues to get harder for Victorians across the state,” Victorian Liberal Party leader John Pesutto said.
‘Renters, homebuyers and Victorians with the most modest properties serving as retirement savings should not be the ones paying for the Labor government’s financial mismanagement.
“With multi-million dollar losses on major projects and record debt continuing to grow, it is inevitable that Victorians will continue to pay new and higher taxes under the Labor government.”
Daily Mail Australia has contacted Victorian Treasurer Tim Pallas for comment.