Home Property Australia What you need to know about the Victorian state Budget

What you need to know about the Victorian state Budget

  • May 08, 2024
  • by Property Australia
Victorian Premier Jacinta Allan

For the first time in years, there are no new taxes or levies in this year’s Victorian Budget.

Yet, the Victorian Government expects a $15.2 billion deficit this year, with net debt reaching $187.8 billion by 2028. Treasurer Tim Pallas anticipates an operating surplus of $1.5 billion by 2025-26.

Premier Jacinta Allan said it is a budget focused on helping families. 

“We know inflation is hurting – that’s why this Budget is all about making life that little bit easier for families, including help to cover the costs of sending kids to school.

“It’s also a Budget that makes the sensible and disciplined decisions to respond to the challenges ahead and secure a strong future for our state.”

Property Council Victorian division said the budget misses the mark on housing. 

“The fundamental drivers of the housing affordability crisis are a critical lack of new supply and increasingly intense demand driven by population growth. This is understood by all stake holders – except obviously the Allan Government – underscored by the complete absence of budget measures to alleviate the tax burden on the property industry,” said Cath Evans, Victorian Executive Director of the Property Council.

“While the $700 million extension for the Victorian Homebuyer Fund will assist some Victorians into a home – it will not result in more homes being built and is in reality only tinkering around the edges of the real problem – a critical lack of new housing supply.

“Efforts by the Government to put the brakes on the State’s massive public infrastructure spend are also welcome, but with the slow down to be drawn out over a number of years, the benefits will take some time to reach the industry.

“There are long term workforce challenges that need to be addressed so that the industry has the capacity to build the homes our State desperately needs. We welcome the government’s measures in today’s State Budget to invest in attempting to address the critical labour and skills shortage plaguing the market.

“We recognise the extent of the challenges the State is dealing with and it is critical that the Government continues the dialogue with the property industry to work through the short and long term issues together,” said Ms Evans.

Here are the key announcements for the property industry:

Taxation and Economy

There are no changes to major property taxation regimes, except for the changes to commercial and industrial property taxation which are currently in the Legislative Council of Victorian Parliament. The Government has confirmed that $266 million in revenue will be sacrificed over the next four years should the reforms pass Parliament later this month.


The government has made a new $700 million investment in the Victorian Homebuyer Fund shared equity scheme for 2024-25 before the Fund is phased out and replaced by the federal government’s ‘Help to Buy’ initiative (should it pass Federal Parliament).

The Fund’s cap on regional home prices will increase from $600,000 to $700,000 in regional areas. To access the Victorian Homebuyer Fund, single parents will be able to use the scheme’s dual-income threshold of $208,775.

Planning and Building

The major new funding commitment is a $63 million package over three years to strengthen the activity of a reshaped Victorian Building Authority and progress the building reform agenda, as well as increase access to domestic building insurance.

Following sustained Property Council advocacy and in recognition of the Victorian Planning Authority’s increased responsibilities with the activity centre program, the VPA will receive a $3.5 million funding boost for each of the next two financial years above current levels. However there will be no increase in 2024-25 of precinct structure plan completions above current rates.

For precincts, a $20 million investment will be made to deliver roads and other enabling infrastructure to activate government-owned land at East Werribee, while funding is committed to further progress development of Arden.


The Treasurer confirmed in his Budget speech that the Government will take a more moderate approach to infrastructure investment over the forward estimates, citing increased construction costs, a worker shortage and the need to devote resources to housing construction.

Overall infrastructure expenditure will decline from $24 billion this year to $15.6 billion by 2027-28. The major reduction of expenditure is a delay of at least four years to the Melbourne Airport rail project.

Energy and Sustainability

$38 million will be spent funding an extra 35,000 rebates to help households switch out gas hot water systems to more energy efficient electric systems through Solar Victoria. There’ll also be nearly $6 million to review and enhance the current Victorian Energy Upgrades program.

Regional Victoria

There is $133 million to be spent on the regional rail network – part of this will fund remediation works on the historic Geelong Rail Tunnel between Geelong and South Geelong stations. Additional train services will run on the Warrnambool and Echuca lines.

There is also $691 million towards water projects across regional Victoria, including $270 million to improve waterways and restore wetlands in the regions.

Cost Savings

The government has outlined a range of measures to reduce expenses, with growth in expenses to be limited to 2.2 per cent in 2024-25.

Disappointingly for our members, the Government has flagged a specific cost-cutting measure in reducing the public sector’s office accommodation expenditure. No further specific details were provided in the Budget papers.

Other cost saving measures aside from the deferral of Melbourne Airport Rail are:

• Concluding the Sick Pay Guarantee introduced during the pandemic

• Reducing government advertising expenditure

• Consolidating strategic sourcing and procurement across Court Services Victoria and jurisdictions.

Cost saving measures for 2024-25 are $297 million in total.