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YET ANOTHER LABOR HOUSING TAX
The Hon Michael Sukkar MP
Minister for Housing
Minister for Homelessness, Social and Community Housing
The Victorian Labor Government’s decision to raise taxes on homeowners will hit families, cost jobs in the construction sector and put a handbrake on Victoria’s economic recovery from the pandemic.
The newly introduced Windfall Gains Tax (WGT) on the value uplift of land will impact new developments and rezoned residential land, pushing up the price of houses for Victorian families and hitting hard in regional areas particularly.
Assistant Treasurer and Minister for Housing Michael Sukkar slammed the tax hike and called on the Federal Labor Party to condemn the blatant revenue grab.
“This is yet another shameless tax increase from a Labor Government that will hurt Victorian first homebuyers, farmers and tradies, particularly in rural and regional parts of the state.
“At a time when Victorians are struggling to get back on their feet following the world’s longest lockdown, Dan Andrews and Labor’s solution is to raise taxes.
“This is all about Victorian Labor blowing their budget through poor financial management. Instead of taking the hard decisions and prudently managing their budget, Labor’s solution is to simply increase the tax burden on all Victorians and make it more expensive to buy a home.
“If Federal Labor were serious about helping reduce the cost of living, creating more jobs and increase housing supply, Federal Labor should immediately call on their Labor state counterparts to reverse raising taxes that will hurt Victorian families.
“I am calling on Anthony Albanese to publicly and unequivocally denounce Victorian Labor’s latest housing tax. Albanese’s silence in the face of his fake barbeque buddy Dan Andrew’s tax hike simply shows that higher taxes on homeowners is in Labor’s DNA at all levels of government.”
A report from S&P Global Ratings this week shows that Victoria’s budget position is the worst in the nation, they will emerge from the pandemic in the weakest financial state and their debt levels will have tripled compared to before the pandemic.
Modelling undertaken by Deloitte Access Economics found that Labor’s policy platform they took to the last election would have reduced GDP by $1.5 billion, shrunk the construction sector by $766 million and failed to meet its stated objectives of improving housing affordability and increasing housing supply.
The UDIA have found that the Victorian Government’s new property tax coupled with existing taxes, fees and charges will now comprise up to 42 per cent of the price of a new Melbourne home.
The economic modelling that shows the rezoning tax will render many projects unviable, costing Victoria at least 6,696 dwellings, twenty thousand direct jobs and over $7 billion in economic output.
Housing Industry Association (HIA) Victorian executive director Fiona Nield said the price of a block of land in regional areas could rise tens of thousands of dollars as a result.
“HIA modelling shows that the price of a housing lot in the Geelong growth area is set to increase by as much as $53,000 under the windfall gains tax,” Ms Nield said.
“This is just one part of regional Victoria — the impact of this tax on regional Victorians cannot be underestimated.”
The Victorian Farmers Federation (VFF) has also strongly opposed to this new tax and said that it couldn’t come at a worse time for regional Victoria.
Rather than helping first homebuyers, farmers and the construction sector, the Victorian Government is giving tax breaks to foreign luxury apartment investors with a 50% land tax discount, together with a full exemption from the absentee owner surcharge. In Australia, build-to-rent properties look set to attract rents of about 10-15% more than comparable to rental housing provided by mum and dad investors, just as they have in London.