The property industry in Victoria has slammed planned tax hikes in the state as a blow to jobs, investment, and homeownership dreams.
Additional land tax, stamp duty and a new tax on property investment and development has been roundly condemned by the state branch of the Property Council of Australia in a statement released over the weekend.
“This is a sucker punch to the industry that is building [our] recovery. One in four Victorians work in property and the Victorian Government is raising taxes at a time when it should be creating jobs,” said the council’s Victorian Executive Director, Danni Hunter.
“This is a tax hike on the home ownership dreams of Victorians. We are heading toward a housing affordability crisis and the Government has fast-tracked our way there by slugging homebuyers and businesses in this short-sighted move.”
All Victorians will pay the price
She warned the price for the tax changes would be paid by every single person in the state.
Among the changes being announced are a 19 percent increase in land tax on properties valued at between $1.8-million and $3-million, with the rate to increase from 1.3 to 1.55 percent.
There is also a 13 percent increase in land tax on properties valued at more than $3-million, with the rate to increase from 2.25 percent to 2.55 percent.
Stamp duty will rise by 18.2 percent on a property’s value above $2-million, although the value up to $2-million will still be taxed at the current rate.
Hikes will halt the state’s recovery
A new Windfall Gain Tax, to apply from July 2022, will see 50 percent of the value of uplift as a result of a rezoning going into State Government coffers.
“Tax hikes will cheat Victorians out of the economic recovery we are just starting to enjoy,” Hunter said.
“They will make it more expensive to buy a home, harder to right-size your home, and less attractive to deliver the new housing we so badly need if house prices are going to remain affordable in Victoria.”
According to Hunter, the new tax hikes will make Victorians the most highly taxed community in Australia. Victoria’s land tax rates and stamp duty rates will be higher than in any other jurisdiction.