Foreign buyers will pay more for Victorian houses under an increase to property surcharges in this year's state budget that is set to reap millions of dollars for the Government.

The surcharge for overseas investors will increase from 3 per cent to 7 per cent, potentially raising about $374 million for the Victorian Government over the next four years.

Treasurer Tim Pallas said Victorians would not pay the increased charge.

"This is about ensuring foreign owners pay their fair share," Mr Pallas said.

"It's only fair really that foreign buyers of residential real estate, who enjoy the capital growth as a result of Victoria's liveability, the amenity of our cities, contribute to the maintenance of government services and infrastructure.

"These charges effectively ensure foreign buyers who don't pay taxes such as payroll tax and GST until they reside in our communities, fairly contribute to the development and maintenance of government service and infrastructure just like Victorian taxpayers do."

Victorians to be slugged with higher rent: Opposition

But Shadow Treasurer Michael O'Brien said the increased surcharge would be passed onto the state's most vulnerable residents.

"It will be paid for by Victorians because higher taxes on property simply means higher rents," he said.

"Victorians who are renting often don't have the same financial security as those who are owning their own property.

"This means that Daniel Andrews' broken promise on tax will hit the most vulnerable Victorians, renters, right where they can least afford to pay."

Before the 2014 election, Labor said there would be no increase to fees and taxes if it won Government.

Mr O'Brien said the surcharge was a broken promise, but the Treasurer denied that was the case.

"No Victorian will pay these surcharges. We didn't give the commitment to the world at large, we gave it to the electorate and we've honoured that commitment," Mr Pallas said.