Group says new tax grab a blow to affordability
STAKEHOLDERS in the real estate sector are warning the State Governments proposed new property taxcould exacerbate Victoria’s housing affordability crisis and make home ownership even more difficult.
The Property Council of Australia, Housing Industry Association, Urban Development Institute of Australia (Victoria) and Master Builders Victoria have joined forces to oppose the windfall gains tax which was introduced to the Victorian Parliament last week.
The 50 per cent tax on rezoned land is the 19th new or increased property tax to be introduced by the Andrew Government since it was elected in 2014 and follows big increases in stamp duty and land tax in the May State budget.
According to the group the property, construction, housing and development industry employs one in four working Victorians and contributes 59 per cent of the state’s taxation revenue which is derived from building and property.
The Victorian executive director of the Property Council Danni Hunter said that when the Government announced this proposed tax along with other tax increases in May, they said it was the wrong tax at the wrong time.
“Five months on and after another three devastating lockdowns, our economic and social crisis has only worsened, and the last thing need as we emerge from the world’s longest lockdown is another tax,” she said.
“We are calling on MPs from all sides to… oppose this tax so we can get on with our important economic recovery and get Victoria moving again.”
Property Council research demonstrated that the tax is set to raise hundreds of millions of dollars more revenue than the Government’s conservative estimates, showing that the tax burden on the Victorian community is too high given 59 per cent of the Government’s tax base is already paid for through property taxes.
Victorian executive director of the HIA Fiona Nield said that the tax would only make housing more unaffordable for many Victorians.
“The tax will take disproportionate share of property value from landowners that are in fact helping to support the growth in housing supply that helps keep affordability in check across regional Victoria,” she said.
Chief executive of the UDIA (Victoria) Matthew Kandelaars said that its modelling showed the tax will reduce housing supply by 6696 dwellings, including over 300 affordable, social or disabled access dwellings, based on the analysis of just seven case studies.
“This will cost over 20,000 direct jobs and nearly 100,000 indirect jobs and reduce Victoria’s economic output by nearly $7.5 billion,” he said.
“It’s the value generated from a rezoning that builds more Victorian homes, creates and sustains thousands of local jobs and builds new communities.
“If development stops then housing supply dries up and prices skyrocket and this will have a detrimental impact on Victoria’s liveability.”