Daniel Andrews may slug Victorians with new ‘property tax’ in a bid to boost social housing
As Australia’s housing affordability crisis deteriorates, one Australian Premier believes they have the solution – but it comes with a cost.
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Residents living in one Australian state could soon be expected to cough up some extra cash, after it was revealed a new property tax may be on the horizon.
Sources close to the Andrews government have highlighted there’s a possibility Victorians could be subject to new charges in a bid to cover the cost of its social and affordable housing scheme.
The tax is understood to be part of state government discussions already underway, looking into methods to improve Victoria’s housing supply, an exclusive report by the Sunday Herald Sun revealed.
It comes after new data from the Department of Families, Fairness and Housing (DFFH) unveiled the state’s pool of social housing only increased by 74 units over a four-year period.
Despite the government’s multibillion-dollar “Big Housing Build” investment, the DFFH annual report indicated only 86,887 social housing dwellings existed across the state as of June 30, 2022, compared to 86,813 in June 2018.
During the same period, social housing waiting lists more than quadrupled in applications from 44,000 in June 2018 to 64,168 in June 2022.
It’s not the first time the Andrews government has considered slugging Victorians with a tax to clean up the state’s social housing woes.
Last year, a $800 million social housing tax was introduced to the state in a bid to fund the development of 1700 new low-cost housing units a year.
Under the proposal, a 1.75 per cent levy would have been added to the value of developments with three or more dwellings, escalating the median price of a new house by $20,000.
But this idea was scrapped within two weeks of being announced, after Premier Daniel Andrews copped backlash from the housing industry.
“The property and development sector has chosen an extraordinary position against supporting these sensible reforms, and the dual benefits for planning and vital public infrastructure,” Housing Minister Richard Wynne said last year.
“This would have delivered thousands of more roofs over the heads of Victorians in need, providing them with the dignity of housing.”
Victorian Treasurer Tim Pallas later added: “This package would have delivered massive benefits for the development sector while ensuring a modest and reasonable contribution was returned to social and affordable housing for Victorians.”
“We won’t create super profits for a sector that will not share a portion of the profits with Victorians.”
Now, it’s believed the latest proposal has come about in an attempt to recover the millions of dollars that could have been made under the social housing tax.
In addition to a property tax, a number of other options being discussed including the creation of mandatory inclusionary zoning, which the Herald Sun reports will work by imposing levies or allocating a portion of new builds to the social housing sector.
Victorians react to “money-grabbing” tax
News of the proposed property tax has amassed anger from frustrated Victorians online, as the state’s housing and cost of living crisis runs rampant.
“If Dan keeps money grabbing, he is going to need as much social and affordable housing in Victoria due to the continuous increases on the cost of living,” one person said on Facebook.
“More and more people will not be able to afford to live in their own homes.”
“You can’t keep hitting people who invest in property with more tax and expect rents to be affordable,” another person said.
A third person ridiculed: “Great, what’s next? A fresh air tax every time we walk in the park.”
The backlash comes just two days after Victoria was crowned the highest taxing state in the country after a record year of land tax, stamp duty and other levies.
Over the 2021-2022 financial year, Victorians were forced to fork out $7.3 billion in extra taxes, according to data from the Australian Bureau of Statistics (ABS).
The state surpassed the amount of money NSW residents were made to pay in taxes for the first time in a decade with Victorians paying an average of $5638 to both levels of government compared to NSW residents who paid $5537.
It’s feared these figures will climb even further, with Victoria’s shadow treasurer Brad Rowswell warning residents to brace for a “horror” May budget.
“These figures confirm that Victorians are paying more tax than they ever have before and are getting less for it,” Mr Rowswell said, according to Sky News.
“And it’s only going to get worse for Victorians when the Andrews government hands down what promises to be a horror state budget next month.
“By the Andrews government’s own numbers, their tax take will rise by 14 per cent over the next three years with the land tax take set to increase by 21 per cent over the same time.”
The Andrews government will deliver the 2023-24 state budget on May 23.
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