Victorian Budget: what you need to know

Victorian Budget was handed down yesterday, focusing on cost of living. The Budget has been described as leaving the property sector behind.

The Property Council’s Victorian Executive Director, Cath Evans, says the 2025 budget does nothing to move the industry forward.

“The industry was hoping for progress – instead, we’ve hit a stop sign,” she said.

“Since last year’s budget, we have been loudly advocating for an easing of the tax burden to promote investment, greater support for first homebuyers and feasibility solutions to increase supply. None of this was addressed in the budget.

“The industry is ready to grow, but it can’t grow under the current arrangements.

“Taxes have the industry in a chokehold, with a myriad of government fees, costs and charges that have continually increased and stifled investment. The industry urgently needs to see the development of a roadmap to improve project viability moving forward.”

Victoria continues to scare away much-needed foreign investment, with extensive levies that see investors looking to less punitive states that deliver a stronger return on investment. Property Council research shows that taxes on foreign investment have resulted in a loss of 81,000 homes, an estimated $93 billion boost to the economy, and nearly 90,000 local jobs.

“We are committed to working closely with the Victorian Government to ensure that property is a focus of the state’s economic development. But time is running out to deliver the solutions the industry needs,” Ms Evans said.

Here are the key take outs for the property industry.

Key Budget features

Tax and Economy

• Average total revenue growth over the forward estimates is projected at 3.9 per cent, outpacing average expense growth of 2.8 per cent.
• The government is forecasting operating surpluses of $1.9b in 2026-27, $2.4b in 2027-28 and $1.5b in 2028-29.
• $240m to fund the Economic Growth Statement, which includes measures to cut red tape and ease regulatory burdens.
• Creation of $150m Victorian Investment Fund, which will be primarily dedicated to the regions, with funding to also boost the capacity and skills of entrepreneurs.
• Population growth averaging 1.7 per cent a year over the forward estimates.

Housing

• Previously announced continuation of the expanded off-the-plan stamp duty concessions initially unveiled in October 2024, to now run until October 2026 under the same parameters.
• $3.7m will be spent on delivering the 10-year plan for Melbourne’s Greenfields, with funding rising to $5.4m in 2026-27.
• $653.4m will be provided to support Housing Assistance, including homelessness services, transitional accommodation and social and affordable housing.

Planning & Environment

• As announced last week, $12.1m will be invested into planning work for 13,200 new homes and 8,600 jobs in greenfield suburbs through two new PSPs at Clyde South and Derrimut Fields.
• $24m to deliver the 50 remaining activity centres across metropolitan Melbourne.
• $6m to deliver the 10-year plan for the supply of industrial land as unveiled in last year’s Economic Growth Statement.
• $142.3m to be provided to Solar Victoria to implement multi-year programs to encourage the adoption of solar panels and energy-efficient hot water systmes in Victorian homes and businesses.

Social Infrastructure

• $1.5b to deliver 100 new schools, as well as delivering school upgrades and maintenance across the state.
• $497m to improve and expand mental health facilities.
• $9.3b boost for hospital funding, including $634m to open and operationalise nine new or upgraded hospitals, including in Footscray, Cragieburn, Cranbourne and Phillip Island.

Roads, Transport and Freight

• Roads to be upgraded in growing suburbs, including the Donnybrook Road/Mitchell Street intersection and the Mickleham Road Upgrade Stage 2 in Greenvale. Clyde North will also see significant investment, with Berwick-Cranbourne Road, Clyde-Five Ways Road, and the Patterson Road intersection all receiving funding.
• Funding for new and extended bus services primarily in Melbourne’s north and west including Riverwalk, Kings Leigh, Mt Atkinson, Thornhill Park and Mystique estates, plus upgraded services for the planned Tarneit West station.
• $2.5m will be introduced to deliver trunk infrastructure to unlock regional economic growth, rising to $3.8m in 2026-27.
• $6m to be provided in both 2025-26 and 2026-27 to continue planning and development activities for the future delivery of the Western Intermodal Freight Terminal.

Cost of living measures

• Free public transport for Victorians under 18 every day from 2026 onwards.
• Power saving bonus of $100 for eligible Victorian households with a concession card.
• Funding to enable pharmacists to treat more conditions without a doctor visit and prescription being required.