Tax Return in Victoria FY2025-26
Filing a tax return in Victoria? Australia's personal income tax is entirely federal, so a Melbourne nurse, a Geelong tradie, and a Ballarat teacher all pay tax under identical brackets. This page summarises what Victorian residents need to know for FY2025-26 — federal rates, common Melbourne deductions, and the state-level taxes that occasionally affect individuals.
Victoria does not levy a state income tax. Every dollar of individual income tax goes to the Australian Taxation Office under the federal Stage 3 brackets: $0–$18,200 tax-free, 16% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above. The 2% Medicare Levy starts around $28,011 of taxable income. Whether you live in inner-Melbourne Carlton, the Mornington Peninsula, or regional Bendigo, you use the same return, follow the same ATO rules, and meet the same 31 October self-lodgement deadline (or later via a registered tax agent).
Victoria has the country's most active state revenue regime in some areas, which is worth knowing even though it sits outside your income return. The first home buyer stamp duty concession applies up to $750,000 (full exemption to $600,000, sliding concession to $750,000). Land tax has a notably low general threshold of $300,000 — substantially lower than NSW — and an additional Vacant Residential Land Tax applies in inner and middle Melbourne. Payroll tax only affects businesses above the wage threshold. None of these state taxes appear on your federal income tax return, but they shape investment property cash flows.
Victoria is home to roughly 6.9 million people, with strong concentrations in healthcare, education, advanced manufacturing, financial services, and the arts. Melbourne hosts major banks, four large universities, and a deep healthcare sector employing nurses, doctors, allied health professionals, and aged care workers. Common deductions for Victorian residents include nursing registration fees and uniforms, teaching resources, professional development for accountants and lawyers, working-from-home expenses for hybrid CBD workers, and tools for tradespeople. AusTax AI auto-detects these from receipt photos and tailors the analysis to your occupation.
Victoria at a glance
- Population
- ~6.9 million
- Capital
- Melbourne
- Stamp duty FHB threshold
- Full exemption to $600,000; concession to $750,000
- Land tax threshold (general, 2025)
- $300,000 (significantly lower than NSW)
- Major industries
- Healthcare, education, manufacturing, financial services, arts
- Avg full-time earnings
- ~$1,880/week
Common occupations here
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Frequently asked questions
Do I pay state income tax in Victoria?
No. Victoria does not impose any state income tax on individuals. All personal income tax in Australia is federal and collected by the ATO under uniform Stage 3 resident brackets. The same rates apply whether you live in Melbourne, Geelong, Ballarat, or anywhere else in Victoria. The State Revenue Office Victoria (SRO) administers stamp duty, land tax, and payroll tax — these are property and business taxes that do not appear on your annual personal income tax return lodged with the ATO.
What deductions are typical for Melbourne healthcare workers?
Nurses, midwives, doctors and allied health professionals working in Victorian hospitals routinely claim AHPRA registration fees, professional indemnity insurance, work-required uniforms (with a compulsory or registered logo) and laundry, stethoscopes and other personal medical equipment, continuing professional development courses, and union or professional association dues such as ANMF Victoria. Self-education tied to your current role is also deductible. AusTax AI's occupation profile recognises Victorian healthcare roles and prompts you for receipts you might otherwise miss.
Why is Victoria's land tax threshold so much lower than NSW?
Victoria's general land tax threshold is $300,000 versus $1,075,000 in NSW, meaning many investment property owners in Melbourne enter the land tax net much sooner. This is a state-level decision by the Victorian government to broaden the property tax base. Land tax is paid annually to the State Revenue Office Victoria, separate from your federal income return. However, land tax on an investment property is generally deductible against the rental income you report on your ATO return — so it does indirectly reduce your federal tax.
Does Victoria have any extra taxes I should know about?
Yes — Victoria charges a Vacant Residential Land Tax (VRLT) in inner and middle Melbourne, recently extended statewide for properties vacant six months or more. There is also an Absentee Owner Surcharge added to land tax for foreign owners. The Mental Health and Wellbeing Surcharge is a payroll tax on large employers — it doesn't affect employees directly. None of these change your federal income tax brackets, but they may apply if you own multiple properties or are a non-resident landlord.
I work hybrid from a Melbourne office and home — what can I claim?
Hybrid workers can claim the ATO fixed rate of 70 cents per hour for genuine working-from-home time in FY2025-26, covering electricity, internet, phone, stationery and office furniture depreciation. You need a contemporaneous record of hours. CBD-to-suburb travel between two workplaces in the same day may also be deductible, but home-to-office commute is not. Work-related portions of mobile phone, internet, and computer equipment are claimable separately if you choose the actual cost method instead of the fixed rate.
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