Propertyology head of research Simon Pressley said the Victorian Government had consistently treated hard-working investors, the vast majority of whom earn about $100,000 a year, like “criminals” and a “string of bad policies”, including high taxes, had targeted investors in recent years.
He said poor financial management had also seen the Victorian Government accumulate an “alarming” level of debt, with a daily interest bill of $32 million for Victorian taxpayers.
“This has led to the recent introduction of a raft of new taxes and Propertyology has a complete lack of confidence in the government’s ability and financial capacity to support the state’s economy for years to come,” Mr Pressley said.
“Victoria is one of a number of states that Propertyology has become increasingly concerned about, with various policies that state governments have been implementing for quite some time, but it’s on steroids coming out of Victoria.
“It’s one new piece of legislation after another aimed primarily at investors, whether it’s a raft of new taxes they’ve introduced or the longest laundry list of onerous tenancy laws that dilute the basic control of property owners.”
Mr Pressley said the policies and legislation included the recently announced Land Tax, which from January 1 will see almost every owner of a Victorian investment property hit with an annual fee of $975 per property for those with land valued between $100,000 and $300,000.
rom the middle of next year, vacant land and properties across Victoria that have been unoccupied for six months or more will be taxed at a rate of one per cent of the property’s value.
Victorian property owners who provide short-stay accommodation to the important holiday and corporate market will also soon lose 7.5 per cent of their hard-earned income.
“It gives us no pleasure to say we’ve imposed a complete boycott on an entire state,” Mr Pressley said.
“But I can’t in good conscience tell anyone who has money to invest that there is a location in Victoria that is superior to any other part of Australia.”
Other elements that have influenced Propertyology’s decision include Victoria’s second highest stamp duty costs in the country and its onerous rental laws, including the removal of free market conditions by banning rental tenders, limiting rent increases to once a year, compliance costs for landlords, unilateral notice periods and controls when a landlord puts a property up for sale, and more.
“The decisions that have already been made don’t give us any confidence at all about what’s around the corner,” said Pressley.
“They keep talking about the likelihood of a rent freeze and there’s going to be more taxes coming out of this state government because of the ballooning debt.”
Mr Pressley said Victoria’s debt was projected to reach $239 billion by 2026 and the state also had the second worst economic outlook in the nation behind the Northern Territory.
Propertyology is also concerned about the state’s below-average employment levels, population decline, inadequate government contribution to rental supply and lower rental yields than other states.
“The Victorian Government has dug itself into a very deep debt hole that will take a decade or more to dig out of,” Mr Pressley said.
“Their vicious attitude towards anyone with financial aspirations will severely limit the state’s ability to fund future infrastructure needs, attract investment to create jobs, provide sufficient housing and retain all of its existing population, let alone attract people from other states.
“Personally, I love Melbourne as a city and have an equal affection for various parts of regional Victoria.
“Over the years, Propertyology has invested in a number of Victorian locations and had always envisaged that we would continue to do so.
“But there is a significant segment of the community who, despite their strong core values and aspirations, are being treated like criminals by the State Government.”
“They leave us with no choice but to focus 100 per cent of our attention on the other 80 per cent of Australia.”
Over many years, Propertyology has invested in six different states and provided rental accommodation for 23 individual cities/towns, making it Australia’s most experienced property investment company.
“Australia has seen all sorts of adversity in the long history of our business, but nothing has ever caused us to completely avoid an entire state,” said Mr Pressley.
Propertyology has already started communicating with its clients who’ve already invested in Victoria.
“We will help each client consider the pros and cons of holding, selling or investing elsewhere in Australia,” Mr Pressley said.
Mr Pressley said Propertyology had chosen to announce its decision publicly because it wanted Victoria’s 6.7 million residents to understand the consequences of the situation created by the State Government.
“The same goes for the existing 2.3 million property investors across Australia,” he said.
