Race hate charge over Vic house fire

A man burned down a million-dollar Melbourne home and left a threatening note with Islamic themes in an effort to incite racial hatred, a court has been told.

Fabrizio Ferrari, 41, is alleged to have burned down the vacant Doncaster house on September 19, the day before it was due to be auctioned.

A laminated note was found pinned to the property's front fence, featuring Islamic symbols and the phrase "Allahu Akbar" or "God is Greatest".

"Only the beginning more to come here or homeland, your next move will determine our next attack ... We strike above the neck," the note said.

Ferrari, formerly known as Fabio Deluca, faced Melbourne Magistrates Court on Wednesday on charges of arson and inciting racial hatred.

The court was told that Ferrari is also likely to be charged with making a threat to kill.

Detective Senior Constable Victoria Boughton told the court that police were investigating whether Ferrari made the note.

She said police would also examine Ferrari's phone and computer records.

Charge sheets tendered to the court say the home was worth $1.1 million.

Defence lawyer Lana Treasure said her client suffered from epilepsy, and would require medication while in custody.

Ms Treasure said Ferrari would apply for bail at a later date.

Ferrari, of Doncaster, was remanded in custody for a committal mention on January 19.