What’s happened?
As per our Industry Alert, issued Saturday, the Victorian Government has announced three tax increases affecting our industry.
- Increase to Land Tax from January 2022.
- increase of 0.25 per cent for taxable landholdings worth $1.8m-$3 m; increase of 0.30 per cent for taxable landholdings above $3m.
- Increase to Stamp Duty from July 2021.
- increase from 5.5 to 6.5 per cent on “premium” property transactions with dutiable value over $2m.
- New Rezoning Tax from July 2022.
- for value uplifts between $100,001 to 500,000, a tax rate of 62.5 per cent of the uplift above $100,000; and
- for value uplifts above $500,000, a tax rate of 50 per cent of the total uplift.
- areas subject to the Growth Area Infrastructure Charge will be excluded.
Please note: The Victorian Government is calling this Rezoning Tax a “Windfall Tax”.UDIA Victoria refuses to adopt this misleading term, given the new tax is not simply applicable to those making “massive windfall profits overnight”, as the Government suggests. The tax will in fact hit regional markets, and infill and urban renewal sites including projects rezoned to provide affordable and social housing.
What are we doing about it?
- Direct communications with the Treasurer’s office: Round-the-clock advocacy alerting the Treasurer to the consequences of the tax hikes. Thank you to the developers who have provided us with case studies to bolster our arguments.
- Mainstream media pressure: Alerted the public through media that these taxes will be felt right across the housing market. See our media release here, and comments in:
Additionally, this afternoon we held a joint media conference with other industry bodies to further mount public pressure on the Victorian Government and demand an urgent meeting with the Treasurer and Acting Premier to address the unintended consequences associated with these tax hikes.
- Urgent research on cumulative cost of taxes: To be released in coming days to back up our advocacy with irrefutable evidence.
- Briefing the State Opposition and key cross-bench MPs: Notifying all relevant political stakeholders on what the tax increases mean for Victorian families, jobs, businesses, investment and home prices.
- Alerting and mobilising multi-cultural communities. We have conducted an overlay of ABS data to determine the different cultural demographics that will be hit hard by the tax changes. We’re running foreign language radio ads alerting various cultural communities on the consequences of these taxes, with a call-to-action to contact cross-bench MPs.
- Investigating the details: Our understanding is that of these three taxes, the increase to Land Tax and Stamp Duty will go through Parliament as part of the Budget Bill, while the Rezoning Tax will have its own separate legislation to go through Parliament at a later date. This means we have a critical opportunity to negotiate the terms of the Rezoning Tax, making it a key advocacy priority for UDIA Victoria.
- Identifying issues: Much of the detail around these tax hikes remains unclear. We are speedily gathering information, analysis, research and case studies to demonstrate various damaging scenarios that will come from the tax changes if not urgently addressed by government.
Please be assured we are doing everything possible to ensure your voice is loud, strong and heard in this fight against new and increasing property taxes.
What can you do?
1. To assist our advocacy, UDIA Victoria is gathering information from our members. Please get in touch as soon as you can with the following information:
- Modelling on any of your projects (or a hypothetical project) that factors in the proposed increases and the impact on the END COST TO HOMEBUYERS. We guarantee that any information you provide will be de-identified to protect commercial information;
- Unforeseen impacts of the proposed changes – for example, do you have a project that would provide homes for a vulnerable cohort that may become marginal or not proceed?; and/or
- Case studies of circumstances where these changes will impact everyday Victorians across your current or proposed projects. If so, please let us know if any of these case studies would be media-friendly.
Please send any information through as soon as you can to:
Angela Gaedke: angela@udiavic.com.au; or
Matthew Kandelaars: matthew@udiavic.com.au
2. Contact your local MP
We can let members of the Victorian Parliament know how concerned we are about these tax hikes. This will have an impact when it comes time for the taxes to go through Parliament.
Find your local MP and contact them today.
We will continue to bring you updates with further information in the coming days.
