A Nazi flag that was flying over a home in north-west Victoria has been taken down, after sparking outrage and calls for the display of such symbols to be outlawed.

Key points: Police said the residents of the house were not aware the flag would cause offence

Police said the residents of the house were not aware the flag would cause offence Premier Daniel Andrews yesterday urged the occupants to take the "despicable flag" down immediately

Premier Daniel Andrews yesterday urged the occupants to take the "despicable flag" down immediately The Australian Anti-Defamation Commission is pushing for displaying Nazi symbols to be made illegal

Premier Daniel Andrews yesterday condemned the flying of the flag as "disgusting", amid calls for a strengthening of the state's anti-vilification laws.

The flag, which featured the swastika and other Nazi symbols, was flying over the home in Beulah, a town which is along Victoria's famous Silo Art Trail in the state's Mallee region.

Yarriambiack Shire Council chief executive Jessie Holmes said yesterday there was little the council could do, except for asking the residents to take it down.

Police had received complaints about the flag, and a spokesperson said it had been taken down after discussions with police and council representatives.

The police spokesperson said the occupants of the house were not aware the flag would cause offence.

The residents of a house in the town of Beulah sparked outrage by flying the flag. ( Supplied )

Beulah resident Leanne Shanks said the removal of the flag was a good outcome for the local community.

"Definitely nobody wants to see a flag like that flying around, so good it's been taken down," she said.

"It brings [the locals] down a bit because you put Beulah on the map for all the wrong reasons."

News that the symbol was on public display prompted widespread condemnation and renewed calls for displaying Nazi symbols to be made illegal.

"The people who are displaying that despicable flag … it's just disgusting," Mr Andrews said.

"It is absolutely disgusting behaviour and if there's any decency in that household they will take that flag down immediately."

Independent MP for Mildura Ali Cupper said she was disgusted the flag was flying in her electorate.

"It's shocking and it's awful. It's desperately sad and it's such an insult to all of us who are democratic citizens who believe in inclusion and equality," she said.

The red and black flag resembles a Wehrmacht flag, which was used between 1935 and 1938 to represent the armed forces of Nazi Germany.

It was replaced by another flag when Adolf Hitler became the commander-in-chief of the armed forces in 1938.

Ms Holmes said the flag had shocked residents in Beulah, which she described as a kind and welcoming community.

The ABC has attempted to contact the residents of the house, but has not received a response.

However, The Age newspaper reported one of the residents defended flying the flag above the home, citing her German ancestry.

Independent MP for Mildura Ali Cupper said she was disgusted to hear a home in her electorate was flying a Nazi flag. ( Facebook: Ali Cupper )

Government reviewing 'gaps' in vilification laws

A parliamentary inquiry is reviewing Victoria's anti-vilification laws after Reason Party MP Fiona Patten proposed amendments to extend the Racial and Religious Tolerance Act.

The issues in the bill have been referred to the Legal and Social Issues Committee.

Australian Anti-Defamation Commission chair Dvir Abramovich has been calling on the Victorian Government to ban the display of Nazi memorabilia and flags.

"It's not illegal and that's where the problem lies," Dr Abramovich told ABC Radio Melbourne.

"They are using the swastika as a rallying cry to celebrate the murderous legacy of the Third Reich, and they have the law on their side.

"Anyone who loves this country and believes in the core values that binds us together, of respect and freedoms, would be horrified."

Mr Andrews said the Government had met with Jewish groups and would make a submission to the inquiry focused on a recent increase in anti-Semitic behaviour.

"Anti-Semitism is on the rise. That is a fact," he said.

"It is completely unacceptable for anyone to be flying what is perhaps the ultimate symbol of hate and that is that flag. It is just disgusting behaviour. Nothing justifies that behaviour whatsoever."

He said he hoped the inquiry would give the Government a path forward to deal with any "gaps" in the law.