Steve Altieri is the president of Altieri Constructions and the company has been subdividing and selling land and houses in Ballarat since 2000.

The land tax is a "killer, especially for me", Mr Altieri said.

As part of the Victorian Government's COVID Debt Repayment Plan, the government has dropped the tax-free threshold to $50,000 from $300,000 from the beginning of 2024.

In addition, the land tax rate has been raised to $975 plus 0.1 per cent of an investors' properties valued at more than $300,000.

Over the years, along with selling the houses and land Mr Altieri has developed, the 83-year-old said he has retained a number of properties and today holds a rental portfolio of around 100 homes.

Mr Altieri is a self-made man, who migrated to Australia from Italy in 1959.

He taught himself English, learned to drive trucks and gained a range of skills.

He got his start in property buying and renovating bungalows.

"My land tax last year was $140,000. This year it is $1 million - $20,000 every week," he said.

Mr Altieri's wife Rose Boquida said they would "be out of pocket so much and have no more incentive to have an investment property".

"The interest rates, the land tax, and the goods and services tax (GST) are discouraging investors to buy more (properties)," Mrs Boquida said.

Mr Altieri said for some business people, the rent doesn't cover the interest now.

The latest median rent price of a house in Ballarat is $425 per week, according to CoreLogic.

According to 2021 census data from the Australian Bureau of Statistics, the median mortgage repayment was $1500 per month in Ballarat before successive interest rate increases.

"We do make money but the government is going to take it all," Mr Altieri said. "It's fine but it is not fair. I work hard."

A Victorian government spokesperson said in a statement the land tax scale remains progressive.

"(It) ensures that smaller property investors pay proportionally less than those with larger holdings," they said.

"I will start to sell land and sack people - everyone in my position will do that," Mr Altieri said.

From January 2025, a vacant residential land tax will be introduced in Victoria, affecting people who own residential land in Victoria vacant for more than six months in 2024.

CoreLogic research head Eliza Owen said the introduction of vacant residential land taxes are aimed at "making housing more efficient".

It is "to disincentivise land banking by investors in order to redistribute residential land to those who can get use out of it", Dr Owen added.

"For those who own vacant properties, the idea was that they will be encouraged to either put properties on it or sell the land," Dr Owen said.

However, Dr Owen said the housing development environment is "very challenging".

She said the cost of constructing a detached house has risen 26 per cent since the start of the pandemic.

The price of material inputs have risen substantially amid the supply chain disruptions and elevated global demand, meanwhile, the labour market is very tight, she added.

"It is a good principle to have in your tax policy to promote the more efficient use of land and minimise land banking, but the construction conditions at the moment aren't really conducive to making that happen easily," she said.