Homeowners could be slugged with higher rates bills due to proposed housing policy

The Premier says the radical social housing plan is “very, very uncertain” after it was revealed homeowners could be hit with higher rates bills and parking fines to recoup millions in lost revenue.

Premier Daniel Andrews has indicated that his government’s controversial new social housing tax has stalled.

“I think it’s fair to say that the future of this Bill is very, very uncertain,” Mr Andrews said outside parliament on Wednesday.

It comes after the Herald Sun revealed that millions of homeowners could be hit with higher rates bills under the proposed new policy.

Parking fines and other council fees and charges could also be increased to recoup millions in lost revenue, with Mayors across the state outraged with the decision.

Mr Andrews on Wednesday backtracked on the announcement, which was first announced by Housing Minister Richard Wynne and Treasurer Tim Pallas on Friday.

City of Melbourne parking inspectors in the CBD. Picture: Jason Edwards

He also hit out at Property Council CEO Danni Hunter, claiming that her position on the matter had changed.

“We’ve now seen, that despite the CEO of the Property Council (having) called for these exact measures when that person worked at a different property peak, despite the fact that an agreement had been reached and the outcome of that long dialogue was they’d support such a profit sharing model, they now oppose that profit sharing model,” he said.

“Apparently that’s not their position anymore, which means we need to revisit these issues.”

“We proceeded on that basis, and within moments of the announcement being made, and what we had anticipated would be support … wasn’t there.

“There wasn’t one process. It wasn’t a throwaway comment, it was a pretty deep engagement and I think we were very surprised to see those comments on Friday last week.

“They were fully aware of what we intended to put forward.”

In a statement, Ms Hunter said the Property Council “proudly advocates on behalf of our members to grow Victoria”.

“With 59 per cent of the Victorian taxation revenue coming from the property sector, we see ourselves as a partner in Victoria’s economic growth and will continue to work with the government,” she said.

“This is the 10th new tax this government has introduced, the second in the last ten months. We remain committed to working with government to deliver planning reform and to support social and affordable housing.

“Our members deliver social and affordable housing for all Victorians and are proud of the role we play. All our members are concerned about the flow of effects of new taxes on housing affordability and will to work with government to put in place appropriate reforms.”

Public housing tower in Melbourne. Picture: David Crosling

Following Mr Andrews’ comments, the state Opposition confirmed their planned 5pm briefing on the policy had been cancelled.

Shadow Treasurer David Davis accused Mr Andrews of “frogmarching”.

“They seem to be retreating at a very fast rate. It’s clearly stalled in some way. Something is going on,” he said.

Mr Davis said the government was unable to say when the meeting would be rescheduled.

“It’s sort of on the never never now,” he said.

“This isn’t about social housing. This is about the Andrews Labor Government seeking to shift the rates cost from their budget bottom line, to the bank accounts of everyday Victorians.

“It’s the same old Labor. When they run out of money, they come after yours.

“All Victorians are paying the price of Labor’s waste and budget incompetence.”

Ratepayers could bare the brunt of the government’s new social housing rates exemption.

Modelling prepared for Yarra Council, and seen by the Herald Sun, had warned an average annual rates increase of up to $79 per property by 2026-27.

The government’s rates exemption – to come into effect in July 2023 – would apply to all social housing properties in Melbourne, Geelong, Ballarat and Bendigo.

The mayors of Darebin, Hume and Moonee Valley councils joined forces to urge the Victorian government to defer the proposed changes until “thorough engagement” had been done with affected councils.

According to exclusive figures obtained by the Herald Sun, residents in Moonee Valley face being charged an extra $51 per year, while those in Darebin and Hume could be hit with added fees of $50 and $32, respectively.

The City of Casey – which houses 1.7 per cent of rateable social housing properties – will lose $2.7 million in annual revenue, ultimately costing ratepayers an extra $22.

Melbourne City Council will have $2.2 million wiped per annum, with acting CEO Alison Leighton warning the scheme would have big impacts on residents.

“This will limit our ability to reinvest in critical initiatives that support Melbourne’s recovery from Covid-19, and deliver vital services to the growing number of people who choose to call Melbourne home,” Cr Leighton said.

Yarra Councillor Stephen Jolly said it was inevitable that ratepayers would be forced to foot the bill for the government’s new policy, with Yarra tipped to lose almost $4 million a year by 2026-27 under the new scheme.

Hume City mayor Carly Moore said her community will “unfairly bear the brunt of this decision”.

Moonee Valley mayor Samantha Byrne said: “After an extremely difficult past two years of the pandemic, this decision will have significant impacts on many of the services and programs we offer our community, including those who live in public housing.”

Darebin mayor Lina Messina echoed the concerns.

Acting Moreland mayor Lambros Tapinos said it was a “shame this is coming at the expense of local government”.

The government’s rates exemption will apply to all social housing properties in Melbourne, Geelong, Ballarat and Bendigo. Picture: Andrew Henshaw

Maribyrnong City Council is expected to lose $26m over 10 years, with mayor Anthony Tran revealing the council was “disappointed and concerned”.

“Council will need to consider what this will mean for our community and our operations,” Cr Tran said.

Ballarat mayor Daniel Moloney said regional councils “cannot recoup those losses in any other way” because most of their revenue came from rates and budget saving.

Port Phillip mayor Marcus Pearl said they were seeking further detail about the policy.

Municipal Association of Victoria president David Clark said social housing should be supported and subsidised by the state government, not just by ratepayers of each municipality.

“Council rates make up just three per cent of the national tax take, or one sixth of the taxes paid to the state government each year. Yet this exemption is another example of the Victorian government mining local government’s already small tax base for its own service delivery,” Cr Clark said.

Premier Daniel Andrews said the state would “no longer be propping them (councils) up by paying that rate bill”. Picture: Aaron Francis

Shadow Treasurer David Davis said everyday families and small business ratepayers will be “clobbered hard”.

“It’s another nasty special deal from Andrews that will raise the cost of living for everyday families,” Mr Davis said.

“Victorian families will have to pay more rates to pick up the rubbish and provide the services for the social housing sector.”

Premier Daniel Andrews said the state would “no longer be propping them (councils) up by paying that rate bill”.

“We don’t pay rates on schools and we won’t be paying rates on social housing soon, and we believe that is the fair and appropriate thing to do.”

The changes will be introduced to parliament at a later date.