The Victorian state government wants to hit foreign nationals buying houses with a new tax equivalent to 3 per cent of the purchase price of the property. The state budget plan, to be delivered by Treasurer Tim Pallas on Tuesday, is expected to raise $279 million over four years for the Victorian state government.

Foreign housing investors will also pay an extra 0.5 per cent in land tax from 2016 on new and existing properties, raising $53.5 million over four years. Permanent Australian residents and New Zealand citizens are exempt from the new taxes.

Pallas said the surcharges were modest, and it was inherently unfair on Victorians for foreign purchasers to take the gains of owning property in Victoria without contributing to services and infrastructure. "If you own a property in the area then you should contribute accordingly, and these modest charges go some way to redressing that balance," said Pallas.

A survey by the National Australia Bank shows foreign demand for new properties in Victoria has leapt from about 5 per cent in 2011 to more than 30 per cent by the end of 2014. Foreigners invested $14 billion in Victorian property last financial year, up from just $5.8 billion the previous year.