Investment Property Expenses by State: A 2026 Guide for Australian Investors

If you are running the numbers on an investment property, the biggest driver of annual cashflow after mortgage interest is usually not the rent or the council rates. It is state-based taxes and surcharges, and they can vary by tens of thousands of dollars a year depending on where the property sits.

This guide walks through every expense category for an Australian investment property and flags exactly which ones differ by state, so you can compare like-for-like when deciding where to buy.

The Two Buckets

Investment property expenses fall into two categories:

1. One-off purchase costs paid upfront at settlement
2. Ongoing holding costs paid every year you own the property

State-based variation shows up heavily in bucket 1 (stamp duty) and bucket 2 (land tax, surcharges). Most of the other ongoing costs - council rates, strata, insurance, property management - vary more by suburb and building than by state.

One-off Purchase Costs

Stamp duty (transfer duty)

Paid once, at settlement. Typically 3 to 5 percent of purchase price, and the single largest upfront cost after the deposit. Importantly, investors pay the full rate - first-home-buyer concessions do not apply.

Indicative stamp duty on a $750,000 investment property:

VIC is the most expensive end-to-end. QLD is the cheapest. These numbers scale up fast: a $2m Melbourne property attracts around $110,000 in stamp duty on its own.

Other purchase costs

These do not vary meaningfully by state:

• Legal / conveyancing: $1,000 to $2,500
• Building & pest inspection: $500 to $900
• Loan establishment fees: $0 to $1,500
• Lenders Mortgage Insurance (LMI): depends on LVR, not state
• Foreign purchaser duty surcharge: if you are a non-resident, stacks on top of stamp duty. 8 percent in VIC, 9 percent in NSW, 8 percent in QLD, smaller in other states.

Ongoing Holding Costs

Expect $25,000 to $55,000 per year in total holding costs for a typical metro investment property. Here is what makes that up.

Land tax - the biggest state variation

Land tax is levied annually on the unimproved land value of your property (not the full market value) as at 31 December each year. Your principal place of residence is exempt everywhere, but investment properties are fully exposed.

Three things to know before reading the table:

1. Aggregation: multiple properties you own in the same state have their land values added together before the tax is calculated. This can push you into higher brackets quickly.
2. Interstate properties are separate: a property in NSW and one in QLD are assessed independently, so each state's threshold applies separately.
3. Trusts and companies often have much lower thresholds than individuals.

State-by-state at a glance:

On $1.5 million of aggregated taxable land value, the annual land tax bill ranges from roughly:

• NSW: $6,900 per year
• VIC: $10,700 per year (plus COVID-debt levy and any surcharges)
• SA: $13,900 per year
• TAS: $17,700 per year
• QLD: $19,750 per year
• WA: $19,900 per year

A property with $500,000 of land value - well within typical Melbourne metro - triggers land tax in VIC every year. The same land value in NSW would fall well under the threshold and attract zero land tax.

Victoria's extras

Victoria deserves its own callout because it stacks multiple state-level property taxes:

• General land tax from the $50,000 threshold
• Absentee owner surcharge: 4 percent of land value if you are a non-resident. No tax-free threshold - applies from the first dollar.
• Vacant Residential Land Tax (VRLT): 1 percent in year one, escalating to 3 percent by year three for properties vacant more than six months per year. Expanded statewide from 2025.
• Windfall gains tax: applies when land is rezoned, not a property-holding cost, but worth knowing about.

No other state has this full stack.

Mortgage interest

Not state-based, but typically the single largest expense for a geared investment property. At a 6 percent rate on a $500,000 loan, that is $30,000 per year in interest. Fully tax-deductible against rental income.

Council rates

Set by local government, not state, so these vary more by council than by state. Typical range: $1,800 to $2,500 per year nationally. Melbourne City, Sydney City, and Brisbane City councils are broadly similar; rural and outer-metro councils tend to be lower.

Water and sewerage rates

$800 to $1,500 per year. Usage charges are tenant-paid in most states if a water-efficiency notice is in place; fixed service charges remain with the owner.

Strata / body corporate fees

Only applies if the property is in a strata-titled building (apartments, townhouses). Varies enormously by building, not state:

• Small walk-up complex, no facilities: $2,000 to $4,000 per year
• Mid-rise with pool or gym: $4,000 to $7,000 per year
• High-rise with concierge and facilities: $6,000 to $15,000+ per year

Strata fees usually cover building insurance, common area maintenance, and sinking-fund contributions - but not council or water rates. You pay those separately.

Landlord insurance

$1,200 to $2,000 per year typically. Covers rent default, damage by tenants, and liability. Building insurance is often bundled into strata fees for apartments; for houses, you carry it yourself.

Property management fees

Usually 6 to 8 percent of rent collected, plus a letting fee (1 to 2 weeks rent) when a new tenant is signed. Flat fee on a $500/week property: ~$1,500 to $2,500 per year.

Maintenance and repairs

Budget 5 to 10 percent of annual rent. A $25,000/year rental property should have $1,500 to $2,500 set aside annually. Older houses need more; newer apartments usually less.

Vacancy allowance

Not a cash expense, but a planning one. Assume 2 to 4 weeks per year of vacancy on average, which knocks your gross rent down by about 4-8 percent. Higher in regional areas, lower in tight-market capital cities.

Depreciation

Not a cash expense - it is a non-cash tax deduction based on building and fixture wear. A quantity surveyor's report (one-off cost of $500 to $800) unlocks several thousand dollars of deductions per year, especially on newer builds.

Quick Comparison: Where Does Each State Hurt?

If you sort the states by how expensive they are to hold investment property, state-based costs break down as follows:

• Most expensive: Victoria (low land tax threshold, stacked surcharges, highest stamp duty)
• Mid-tier: South Australia (high top land tax rate), Tasmania (low threshold)
• Investor-friendly on land tax: NSW (high threshold)
• Investor-friendly on stamp duty: Queensland, Western Australia
• Cheapest overall: Northern Territory (zero land tax, modest stamp duty)

None of this means you should buy in the cheapest state - capital growth, yield, vacancy, and local fundamentals matter far more over a 10-20 year horizon. But knowing the state tax bill before you commit changes the cashflow picture materially.

How This Affects Your FIRE Projection

When you model an investment property in a FIRE calculator, the line items that change between states are:

• Upfront: stamp duty (goes into cost base for CGT)
• Annual: land tax (goes into "Other expenses" unless there is a dedicated field)
• Tax-deductibility: all of the above are deductible against rental income, which softens the blow through negative gearing

In the GetFired calculator, land tax can be entered as part of the Other line under Annual Expenses on any investment property. A dedicated land tax field with state-aware thresholds is on the roadmap.

Key Takeaways

1. State-based taxes are the single biggest cost driver that changes when you change postcode across a state border.
2. Victoria stacks the most state taxes - general land tax from a very low threshold, absentee surcharge, and VRLT on vacant property.
3. NSW has by far the most generous land tax threshold at over $1 million.
4. NT is the only zero-land-tax jurisdiction in the country.
5. Stamp duty is highest in VIC, lowest in QLD - and is non-refundable regardless of how the property performs.
6. Non-state costs (council rates, strata, insurance, management) vary more by suburb and building than by state - compare them property-by-property, not state-by-state.

Sources current as at February 2026. Rates and thresholds change each budget cycle - always verify with the relevant state revenue office before making a purchase decision.

Further Reading

• Negative Gearing in Australia: How It Works
• Liquid vs Illiquid Assets on the Path to FIRE