Massive tax hikes on Victorian homebuyers, homeowners and property industry jobs

Victorians will be the most highly taxed community in Australia is the Andrews Government has its say

Today the Victorian Government announced massive tax hikes including a $2.4 Billion Land Tax grab on Victorian homebuyers, homeowners, and property industry jobs to be featured in next week’s State Budget.

This is a slug by the Andrews Government to Victorian homeowners, homebuyers and investors with additional land tax, stamp duty and a new tax on property investment and development.

And this comes on top of the recent significant changes to rental legislation in Victoria moving the balance of power to tenants rather than property investors / landlords

The changes announced today were:

• A 19 per cent 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 per cent;
• A 13 per cent increase in land tax on properties valued at more than $3 million, with the rate to increase from 2.25 per cent to 2.55 per cent;
• An 18.2 per cent increase in stamp duty on a property’s value above $2 million, with the value up to $2 million to be taxed at the current rate; and
• A new Windfall Gain Tax, which would apply from 1 July 2022, where 50 per cent of the value of uplift as a result of a rezoning (both local government and state government), as assessed by the Valuer General at the time of the rezoning, will be taken by the Government.

There will be a $100,000 tax-free threshold on the Windfall Gain Tax, and the tax will be able to be deferred to the next transaction.

Land where the Growth Area Infrastructure Charge applies will be exempt.

Victorian Executive Director of the Property Council, 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.”

“This is a tax hike on the home ownership 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 short-sighted move.”

“The Government knows the price for these tax changes will be paid by every single Victorian.”

Leah Calnan REIV president said:

The Victorian Government’s planned assault on property owners with stamp duty and land tax increases in the 2021-22 State Budget will hurt self-funded retirees and worsen housing affordability. Victorian homeowners, buyers and mum and dad investors will be hit with double digit percentage increases in land tax, stamp duty and a new tax on property investment and development.

The REIV strongly believes that the tax hikes will make Victoria a less desirable place to invest, ultimately harming jobs and the economy.

The government continues to burden Victorians with increases to property taxes. Property already accounts for more than 40 per cent of government revenue. There is not much more capacity any one sector to absorb further tax burden.

If the Victorian Government is serious about jobs and housing it needs to invest in real estate, not attack it. These sledgehammer taxes could cause a flight from property by self-funded retirees, for which property investment is their only form of income.

This new tax is the ninth new tax on Victorian property introduced under the Andrews/Pallas administration.

Ms Hunter said that…

“Tax hikes will cheat Victorians out of the economic recovery we are just starting to enjoy. They will make it more expensive to buy a home, harder to rightsize your home and less attractive to deliver the new housing we so badly need if house prices are going to remain affordable in Victoria.”

These 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.

“Victoria’s competitive advantage will be lost to other cities where governments are rolling out the red carpet to welcome new investment because they know it is good for jobs. Instead, Victoria is hiking up lazy, inefficient taxes when what we need is certainty and more investment in our great state,” said Ms Hunter.

A new tax on rezoning will deter development activity that enhances our urban fabric. Ms Hunter said this new tax was a blatant and exorbitant attempt by Government to profiteer from the investment of the property industry in developing and delivering city-shaping projects.

“This new tax is the ninth new tax on Victorian property introduced under the Andrews/Pallas administration. If their intent is to drive investment to other Australian cities who are rolling out the red carpet for investment and creating jobs, then this new tax will do it,”

from Property UpdateProperty Update https://propertyupdate.com.au/massive-tax-hikes-on-victorian-homebuyers-homeowners-and-property-industry-jobs/