NEW PROPERTY TAX ANOTHER BLOW TO ASPIRING HOMEOWNERS
Australia’s leading property, construction, housing and development industry groups say the Windfall Gains Tax passed by State Parliament today is a blow to the home ownership dreams of thousands of Victorians.
The Property Council of Australia, Housing Industry Association, Urban Development Institute of Australia (Victoria) and Master Builders Victoria have been united in their opposition to the Windfall Gains Tax, the 19th new or increased property tax under the Andrews Government.
The 50 per cent tax on rezoned land follows big increases in stamp duty and land tax in the May State Budget and will make home ownership even more difficult and costly for Victorian families.
The Property Council’s Victorian Executive Director Danni Hunter said: “This is a tax on Victorian families, jobs and investment when we can least afford it as we finally emerge from the world’s longest lockdown.
“This new tax will only make it harder for average Victorians to realise their home ownership dream, many of whom have watched on in horror as property prices skyrocketed over the last 12 months.
“As a result of severe stress in the industry due to COVID shutdowns, supply and labour shortages and rising costs in the construction sector, it is anticipated that 25,000 homes fewer than pre-pandemic projections will be brought to market in Victoria by 2023. Increasing the tax burden will only increase the number of Victorian families priced out of a market where supply is already unable to keep pace with demand.”
The property, construction, housing and development industry employs one in four working Victorians and already pays 59 per cent of the state’s taxation revenue which is derived from building and property.
Victorian Executive Director of the HIA Fiona Nield said the tax would make housing more unaffordable for many Victorians, with the price of a housing lot in the Geelong growth area to increase by as much as $53,000 under the Windfall Gains Tax.
“We know that over 90 percent of renters aspire to home ownership but less than half believe they will achieve this goal,” she said. “There is no way that you can improve housing affordability by adding new taxes, fees and charges.”
“It will impact land prices and home buyers at all levels at a time when housing continues to become less affordable as dwelling prices outpace earnings. This is especially true in regional areas of Victoria”.
Chief Executive of the UDIA (Victoria) Matthew Kandelaars said its modelling showed the tax will equate to at least $250,000 per hectare in regional Victoria, compared to just over $100,000 per hectare in Melbourne’s growth corridors that is levied through GAIC.
“There’s no justification to hit regional Victoria with a tax more than double that charged in Melbourne. The Government has chosen to leave the regions behind with the passage of this new tax,” he said.
“It’s the value generated from a rezoning that builds homes, creates and sustains jobs and builds communities. If development stops then housing supply dries up and prices will skyrocket.”
Master Builders Victoria CEO Rebecca Casson said the new tax could jeopardise Victoria’s economic recovery. “The building and construction industry supports 320,000 Victorian workers and delivers thousands of new homes a year and is critical to our state’s economic recovery from the pandemic,” she said.