Shire urges land tax trial as Lorne housing crisis deepens

LORNE is at “breaking point”, the Surf Coast Shire says, as a lack of affordable housing pushes key workers out of town and threatens the delivery of essential services.

In a statement shared to its website, the shire said housing pressures had reached a critical point, with just two of Lorne’s 29 teachers living locally and a specialist paramedic unable to find stable accommodation.

“There is a critical shortage of key worker housing in Lorne,” it reads. “Many are struggling to find accommodation or living in rental stress.

“Affordable accommodation is desperately needed for people who deliver vital services (such as teachers, nurses, retail, hospitality, ambulance, police).

“Local real estate agents have observed that increased land tax and holding costs are causing property owners who have offered 10-plus years of affordable long-term renal accommodation to consider selling.

“This trend threatens housing stability and pushes essential workers out of town.”

In response, the shire is calling on the Victorian government to trial a land tax exemption pilot in Lorne, aimed at increasing the number of long-term rental properties available to key workers.

The proposal has been developed in collaboration with the Lorne community, including the Lorne Affordable Housing Project working group, and has the support of community organisations such as Committee for Lorne and Friends of Lorne, the shire says.

Under the proposal, a limited number of properties would receive a land tax exemption on the condition they are made available for long-term rental for a minimum of 24 months.

Housing data outlined by the council highlights the scale of the challenge facing the township. Of Lorne’s 1,775 dwellings, more than 60 per cent were unoccupied at the time of the 2021 Census.

Long-term rentals are estimated to account for only 3 per cent to 9 per cent of the town’s housing stock, while around 465 – roughly a quarter of all homes – are listed on short-term stay platforms such as Airbnb.

Meanwhile the average annual land tax bill sits at $3,720, with some property owners paying up to $15,000.

“Empty holiday homes can become lifelines for essential workers, with no cash outlay for the government,” the shire said.

“This pilot will reimagine housing by transforming idle properties into homes for those who keep our communities running.

“Removing land tax for a limited number of eligible property owners will encourage them to make their properties available for long-term, rather than short-term, rental.”

It estimates the cost of waiving land tax for 20 homes for 12 months at $74,000, compared with about $2 million, plus land costs, to build 10 modular homes.

One paramedic, identified as Luke, said the lack of stable housing was already affecting community safety.

“As a MICA paramedic with advanced lifesaving skills, I deliver intensive care in emergencies,” he said.

“Without stable housing, I’ll be forced to leave, creating a revolving door of less experienced paramedics and impacting community safety.”

Housing key workers locally, the shire said, was critical to Lorne’s economic and social sustainability, helping ensure schools remain staffed, businesses can operate and vital services continue to function.

“Housing local teachers, paramedics, chefs, and other essential workers isn’t just about convenience, it’s about economic survival,” the shire said.