Key property industry player pushes for ‘tax summit’ under new government

Calls are mounting for the next Victorian government to launch a major reform of the state’s property taxes, which have been lashed as “unsustainable”.

Another key player in Victoria’s property industry has called on the next state government to launch a major reform of the state’s taxes, warning the current system is broken.

The Urban Development Institute of Australia Victoria, in its state election platform, has called for a major rethink on stamp duty and other charges and called for the next Victorian government to hold a “tax summit” to reduce the burden on home buyers.

They have also urged for no new taxes or increased charges amid speculation a dumped developer tax to fund affordable housing could be revisited next term.

UDIA Victoria chief executive Matthew Kandelaars said property taxes now made up half of state revenue, up from 18 per cent a decade ago, and this was unsustainable.

UDIA Victoria chief executive Matthew Kandelaars says Victoria has lost its competitive advantage.

“The system is so broken and reliant on property taxes that we’re beyond the point where we can tinker around the edges,” he said.

“We need a holistic approach and a fresh start.

“Everything should be on the table at the summit – including any proposal for a stamp duty and land tax swap, the removal of foreign purchaser taxes, increasing stamp duty thresholds to address bracket creep, and addressing infrastructure and development charges.”

Mr Kandelaars said there was a clear link between home prices and development taxes.

“Affordability is threatened and Victoria has lost its competitive advantage – we can’t accept the status quo,” he said.

Mr Kandelaars said whatever party was elected, they needed to commit to no new or increased properties taxes and to call the tax summit within 100 days.

“Until the over-reliance on property taxes is addressed, housing affordability will remain at risk and the dream of owning a home will remain out of reach for the average Victorian family,” he said.

“The evidence is clear: tax reform to reduce the burden on Victorian home buyers will support housing affordability and de-risk the state’s economic recovery.”

In their platform, the UDIA have called for the state to make sure that property taxes make up no more than 35 per cent of budget revenue.

They have also pushed for reform of the planning system, including greater funding and resources for local governments to do this work in Melbourne’s outer suburbs.

The Urban Development Institute of Australia Victoria wants a major rethink on property taxes.

Other requests include short, medium and long term targets for to restore migration and to maintain quarantine facilities and vaccine supplies to battle future Covid outbreaks.

A pipeline of priority projects in growth communities was needed to make sure Victorians weren’t left behind.

“Without the upfront delivery of this infrastructure, Melbourne’s growing communities will be

disadvantaged through a lack of walkability, public transport and access to health and

education services,” the platform reads.

“The development industry often bears the brunt of a local community’s disappointment

flowing from a lack of timely and appropriate infrastructure, however it already directly

contributes a total of $6.4bn annually through various contributions.

“No new taxes or charges are required, but a future Government must ensure a clear plan, and funding, for the delivery of catalytic infrastructure in Melbourne’s growth corridors and regional centres to ensure their liveability.”