- Two land taxes will increase for those valued about $1.8M
- Stamp duty above $2M will also increase
- A new Windfall Gains Tax will affect land impacted by rezoning
The Property Council of Australia (PCA) has attacked the Victorian Government’s new land tax arrangements labelling them as a “sucker punch” to the industry. Along with increases in some land taxes and stamp duty, a new tax is set to be created impacting windfalls associated with rezonings.
“One in four Victorians work in property and the Victorian Government is raising taxes at a time when it should be creating jobs,” said Danni Hunter, the Victorian Executive Director of the Property Council.
“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.”
Danni Hunter, Property Council (Victoria)
Under the new proposal, there will be a 19% increase in land tax on properties between $1.8 million and $3 million – from 1.3% to 1.55%. Properties valued at more than $3 million will see their rate increase from 2.25% to 2.55% – an 18.2% increase.
In addition to the land tax increase, the stamp duty for properties valued above $2 million will increase by 18.2%. For those under $2 million, the rate will stay the same.
Additionally, a new Windfall Gain Tax will be created whereby after 1 July 2022, 50% of the value of uplift due to rezoning – as assessed by the Valuer-General at the time of rezoning – will be taken by the Victorian Government.
Ms Hunter said the new taxes will mean Victoria has the highest land tax and stamp duty rates across the country. She argues the taxes are inefficient and would impact housing affordability.
“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.”
“…Victoria is hiking up lazy, inefficient taxes when what we need is certainty and more investment in our great state.”
Ms Hunter additionally added that the rezoning tax – the ninth new property-related tax the incumbent Victorian Government has introduced – will deter future urban planning, and has called upon the opposition and crossbench to scrutinise the proposals.
“We will fight this on all fronts.”
“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 (to) act swiftly to stop this happening.”