New Victorian taxes to hit renters, hike up property prices
A suite of taxes announced ahead of Victoria’s state budget have been criticised by property groups and unions.
The Andrews government faces criticism from property groups and the state opposition over new taxes it says are designed to boost economic recovery following the COVID-19 pandemic.
Ahead of the state budget on Thursday, Treasurer Tim Pallas announced a land tax rise of 0.25 per cent for properties exceeding $1.8m and 0.30 per cent for those exceeding $3m, and a “windfall gains tax” on profits made from land rezoning would raise $2.7bn in revenue.
Real Estate Institute of Victoria president Leah Calnan slammed Labor’s plan and said it would “make investing in Victoria unattractive and unaffordable”.
“I think as a state we are trying to get back on our feet so the timing of such an introduction of these additional taxes seems very unjust for Victorians,” Ms Calnan said.
“Ultimately, with the introduction of a windfall tax, it will flow through to the people purchasing those properties … and create further issues with regards to housing affordability.”
Ms Calnan said renters would wear the land tax hike because there were more “million dollar suburbs than ever before” in the state.
Property Council of Australia executive director Danni Hunter said the tax increases were “aimed squarely at Victorian families, small businesses and the property sector” which had contributed to the state’s economic recovery amid the 112-day lockdown last year.
“Housing is already unaffordable and first-home buyers are deflated in their efforts to break into the market. This tax may not be directed at them, but it will be passed down to every homebuyer in the long run,” she said.
Amid a plan to limit guaranteed public sector wage rises to 1.5 per cent a year, Victoria’s Community and Public Sector Union secretary Karen Batt called for politicians to commit to the same rate.
Opposition finance spokesman Matthew Guy said the Labor government was “scrounging around for money anywhere they can find it”.
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