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{{propApi.successMessage}} {{region}} Change locationFrom lockdown to lock out Victoria introduces another tax
From lockdown to lock out Victoria introduces another tax
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Despite the lockdowns median house prices are on the rise in Melbourne.
Adding to this cost burden will be the State Government’s proposed Windfall Gains Tax, which will likely pass through the Legislative Council next week and become law.
In pursuing such an outcome, the Government appears determined to put home ownership out of reach for even more Victorians, by placing further upward pressure on the cost of land for new housing which continues to be in short supply.
The Windfall Gains Tax is only a windfall for the Victorian Government. For every day Victorians, it’s a slowing of the state’s economy and a tax on Victorian jobs at the worst possible time, as the state rebuilds from the world’s longest COVID pandemic lockdown.
The Windfall Gains Tax will see 50 per cent of any uplift in land price by more than $500,000 as a result of rezoning going straight into the government’s coffers.
The timing of this new tax couldn’t be worse. It will come as homes built using the recent Federal Government’s HomeBuilder grant will have been completed, with the risk that new home builds will most likely be in decline threatening jobs in the years ahead.
Future homebuyers, many whom would have already been waiting patiently to buy and build their own home, will be faced with rising land costs because of the new tax.
For private land owners, the tax will be a major disincentive for them to sell or develop their land for housing, and if they do then the costs will be passed directly to developers and homebuyers.
Bringing new land to market in Victoria takes up to a decade, meaning land owners already manage the risk, cost and changing legal arrangements that may affect a project. Certainty is key - land owners are used to paying Federal taxes on property sales, but this Windfall Gains Tax will bring unnecessary complexity to Victorian property transactions and slow down housing supply. Developers who purchase land for housing development may simply not be able to proceed with their projects in the years to come.
HIA has come together with other Victorian Industry Groups to oppose this tax. At a time where recovery from COVID-19 is the biggest concern, a new tax on property should simply be shelved.
For more information please contact:
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