Housing groups have lambasted the Victorian government's plans to increase stamp duty and property tax, saying tax hikes would only hurt affordability and slow demand for housing.
Fiona Nield, executive director of Victoria at the Housing Industry Association (HIA), said increasing property taxes and stamp duties would only hurt Victorian home buyers. She said more than 40% of state government revenue comes from property taxes, which is already a burden for many market players.
"It is unfair to tax landowners more when Victoria already has the highest stamp duty rates in the country," she said. "New taxes like these are reflected in higher land prices for all and the stamp duty prevents people from selling properties to allow new homes to be built – this has a direct impact on affordability new housing. "
In a statement, State Treasurer Tim Pallas said the government "will strike a balance between those who want to buy their homes and large real estate investors who continue to profit from soaring real estate values."
With this, the state government is proposing a new windfall gains tax for real estate developers. Developers and speculators will be required to pay a windfall tax of up to 50%, applied to land rezoning decisions from July 1, 2022.
Additionally, a new increased stamp duty rate will be charged for real estate transactions over $ 2 million. For such transactions, the stamp duty will be increased to $ 110,000 plus 6.5% of the dutiable value in excess of $ 2 million. This change is expected to impact less than 4% of transactions.
"It is fair that those who make big profits bring a reasonable proportion back to the community – that means more Victorians can have the schools, hospitals and support they need and deserve" , Pallas said. "Our tax system is fair and progressive – we ensure that everyone pays their fair share to support Victoria's economic recovery."
Nonetheless, Nield believes that the new windfall tax is of some concern and will only help reduce demand in the state and worsen affordability, in especially in regional areas.
"The new windfall tax appears to take a disproportionate share of property value from landowners who actually help support the growth in housing supply which helps keep affordability in check in the Victoria area, ”she said.
Leah Calnan, president of the Victoria Real Estate Institute, said tax hikes would make the state a less desirable place to invest.
"There is not much more capacity for a sector to absorb an additional tax burden. These massive taxes could cause property leakage by the self-funded retirees, for whom the real estate investing is their only form of income, ”she said.
Gil King, CEO of REIV, said these tax hikes would eventually push home ownership beyond the reach of many hard-working Victorians and cripple pension plans.
"This thoughtless ad shows a fundamental misunderstanding of the real estate market and the contribution it makes to the economy, including its influence on Victoria's economic recovery from COVID," he said. he declares.
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