Victorians to be slugged $2.7bn in extra taxes, fees as Andrews Government targets property owners

Land owners and homebuyers will be hit with the multibillion-dollar bill in a bid to reduce the state’s soaring COVID-induced deficit.

Land owners and homebuyers will be slugged billions of dollars in extra taxes in ­Thursday’s state Budget to reduce Victoria’s soaring deficit after COVID-19’s economic carnage.

The cost of paying court and traffic fines will also be jacked up 10 per cent, or about $20 for the lowest-grade speeding offence, after being frozen during the worst of the pandemic.

Fees and charges, also frozen last year, will rise by the rate of inflation.

Treasurer Tim Pallas defended the massive hit, which aims to raise almost $2.7 billion over the next four years, saying the government wanted to keep spending on health and services.

Also included in the new whack is a tax on Keno operators who sell tickets online to Victorians, as well as an increased tax on developers making windfall profits.

The land tax hike, which will increase rates for large holdings worth over $1.8m by at least 0.25 per cent, is the biggest revenue measure and will reap $1.5bn over four years.

Mr Pallas said the pandemic had “asked all of us to focus on the things that matter most” and governments were no different.

“We’ve invested in our health system to keep Victorians safe, and we’ve kickstarted our economic recovery with hundreds of thousands of new jobs,” he said.

“It’s only fair that those making large profits return a reasonable proportion to the community – this means more Victorians can have the schools, hospitals and support they need and deserve.

“Our tax system is fair and progressive – making sure that everyone pays their fair share to support Victoria’s economic recovery.”

Victorian Treasurer, Tim Pallas defended the massive hit, which aims to raise almost $2.7 billion over the next four years. Picture: Sarah Matray

With the median price of homes in Melbourne passing the $1m mark earlier this year, the Andrews Government has decided to jack up stamp duty for properties worth double that amount.

Any home worth $2m or more transferred after July 1 will face an extra 1 per cent on stamp study, taking the rate to a maximum of 6.5 per cent.

At the moment, stamp duty is a maximum of 5.5 per cent for properties worth more than $960,000.

A special windfall gains tax will apply to rezoning of land from next July, with the government saying this will ensure “multimillion-dollar overnight profits are shared with the community”.
It will apply to the total value uplift from a rezoning on windfalls above $100,000, and will be 50 per cents on mega-profits worth above $500,000.

Areas subject to the Growth Areas Infrastructure charge will not be affected.

Property Council of Australia Victorian exec director Danni Hunter said: “This is a sucker punch to the industry that is building Victoria’s recovery. One in four Victorians work in property and the Victorian government is raising taxes at a time when it should be creating jobs.”

Ms Hunter said “this is a tax hike on the homeownership 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 shortsighted move”.

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