Property industry slams tax hikes as blow to jobs, investment, and homeownership dreams of Victorians
The Property Council of Australia has condemned the Andrews Government’s plan to slug Victorian homeowners, homebuyers and investors with additional land tax, stamp duty and a new tax on property investment and development.
Victorian Executive Director of the Property Council, Danni Hunter said, “this is a sucker punch to the industry that is building Victoria’s recovery. One in four Victorians work in property and the Victorian Government is raising taxes at a time when it should be creating jobs.”
“This is a tax hike on the home ownership dreams of Victorians. We are heading toward a housing affordability crisis and the Victorian Government has fast tracked our way there by slugging homebuyers and businesses in this short-sighted move.”
“The Government knows the price for these tax changes will be paid by every single Victorian,” she said.
The changes to be announced today include:
- A 19 per cent increase in land tax on properties valued at between $1.8 million and $3 million, with the rate to increase from 1.3 to 1.55 per cent;
- A 13 per cent increase in land tax on properties valued at more than $3 million, with the rate to increase from 2.25 per cent to 2.55 per cent;
- An 18.2 per cent increase in stamp duty on a property's value above $2 million, with the value up to $2 million to be taxed at the current rate;
- A new Windfall Gain Tax, which would apply from 1 July 2022, where 50 per cent of the value of uplift as a result of a rezoning (both local government and state government), as assessed by the Valuer General at the time of the rezoning, will be taken by the Government.
Ms Hunter said that, “tax hikes will cheat Victorians out of the economic recovery we are just starting to enjoy. They will make it more expensive to buy a home, harder to rightsize your home and less attractive to deliver the new housing we so badly need if house prices are going to remain affordable in Victoria.”
These tax hikes will make Victorians the most highly taxed community in Australia. Victoria’s land tax rates, and stamp duty rates will be higher than in any other jurisdiction.
“Victoria’s competitive advantage will be lost to other cities where governments are rolling out the red carpet to welcome new investment because they know it is good for jobs. Instead, Victoria is hiking up lazy, inefficient taxes when what we need is certainty and more investment in our great state,” said Ms Hunter.
A new tax on rezoning will deter development activity that enhances our urban fabric. Ms Hunter said this new tax was a blatant and exorbitant attempt by Government to profiteer from the investment of the property industry in developing and delivering city-shaping projects.
“This new tax is the ninth new tax on Victorian property introduced under the Andrews/Pallas administration. If their intent is to drive investment to other Australian cities who are rolling out the red carpet for investment and creating jobs, then this new tax will do it,” said Ms Hunter.
“We will fight this on all fronts,” she said.
The tax changes will be introduced into the Parliament by the Andrews Government as part of the State Budget Bill. The Property Council of Australia will be working with the Government, the
Opposition and the Cross Bench in coming days and weeks to demonstrate the crippling effect these tax changes would have on all Victorians.
“These taxes will blow up in the face of every new homebuyer, every Victorian homeowner and renters the moment it passes the Parliament. We have act swiftly to stop this happening.”
“The Victorian Parliament must act to avoid setting a tax time-bomb under everyday Victorians and taxing our fragile recovery to a standstill,” said Ms Hunter.
Media contact: Danni Hunter | M 0400 230 787 | E [email protected]