Property Council of Australia proposes ‘special economic zones’ to boost Melbourne market

A radical new plan has been concocted to help battle the growing housing crisis.

Slashing taxes and red tape in select pockets of Melbourne and regional Victoria has been floated as a plan to help meet the state’s target of 80,000 new homes per year.

Under the proposal – from the Property Council of Australia – exemptions on payroll tax for business, land tax, absentee owner surcharges and reduced council rates would be focused in key growth areas.

The Victorian government released its housing statement in September, announcing a strategy to build 800,000 homes in the next decade to tackle housing affordability.

In the lead up to this year’s state budget, the property council has submitted its proposal to create “special economic zones” in under-utilised or undeveloped areas of Melbourne and the regions.

The Property Council’s Victorian executive director Cath Evans said such a scheme could “supercharge” a housing market that has deteriorated in recent years.

The Property Council of Australia has released a proposal to boost housing supply in Victoria. Picture: NCA NewsWire / Nicki Connolly

In its submission, the body argues planning schemes should allow for accelerated approvals in those zones, and for cuts to stamp duty for people buying in the designated areas.

“These zones could be implemented in the government’s 10 defined activity centres as well as other strategically important locations with existing infrastructure in place,” the submission states.

“Enabling geographically defined areas for targeted implementation would facilitate rapid growth and support decentralisation to the regions.”

The 10 activity centres in Melbourne, as identified by the state government, include suburbs like Broadmeadows, Epping, Frankston, Chadstone and Moorabbin.

Other areas that could be included are regional centres with transport links like Geelong, Ballarat or Bendigo.

Property Council of Australia Victorian executive director Cath Evans. Picture: Jake Nowakowski

Similar schemes exist around the world and in Queensland, where a Priority Development Area regime was created to fast track new builds.

It’s hoped that the offer of a tax “holiday” could attract business and industry to targeted areas, bringing jobs and more housing.

“This would supercharge the growth and liveability of centres in Melbourne and our regional centres, Ms Evans said.

In the submission, she wrote that 2023 was an “extraordinarily challenging” year for the industry, with approvals for new dwellings falling by 11,000 in that period.

Ms Evans said the state’s housing statement had provided “much needed clarity” but it needed to be partnered with other reforms and initiatives to attract skills and investment.

“This is time critical, and with the May budget to be released, we’re calling on the government to use every lever at its disposal to support immediate growth in the industry,” she said.

Victoria has set a target of 800,000 new homes built by 2034. Picture: William West/AFP

The Property Council has also advocated for the expansion of off-the-plan concessions for all buyers, scrapping stamp duty on apartments worth up to $1m for all owner occupiers and local investors.

It also called for a 50 per cent stamp duty discount for properties worth $1m to $1.5m, to offset rising construction costs that have influenced prices for larger apartments.

This would help boost the supply of apartments, it argues, which have fallen from 20,000 per year m 2017 to just 5000 in the year to 2023.

“We believe that with stamp duty relief for buyers, it will help the restart the apartment market because it’s a more affordable option,” she said.

Originally published as Property Council of Australia proposes ‘special economic zones’ to boost Melbourne market