The Real Estate Institute of Victoria has slammed a series of property tax initiatives which have been unveiled in advance of the State Budget this Thursday.
Over the weekend, Victorian Treasurer Tim Pallas revealed the State Budget would include land tax increases for properties valued over $1.8 million, a new ‘windfalls gains tax’ for properties whose value is boosted by council rezoning, and a premium stamp duty for property transactions above $2 million.
Labelling it an “assault on property owners”, the REIV said the measures would 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 claimed.
REIV President, Leah Calnan said the tax hikes would 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,” Ms Calnan said.
“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,” she said.
According to REIV CEO Gil King, the tax hike will push homeownership out of reach for many hard-working Victorians, while crippling the retirement plans of countless others.
“This ill-considered announcement 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 post-COVID,” Mr King said.
“At a time when commercial CBD properties are struggling to find tenants, the increased taxes will put an extra burden on commercial real estate, which has already had to grapple with COVID-19 lockdowns throughout 2020.
“The vast majority of State Government COVID-19 support was directed to renters, not property owners – these taxes will be the final straw for many.
“It is also highly likely that increased property taxes will flow on as rent increases,” he said.
Representing an overwhelming majority of over 80 per cent of Victorian real estate agencies, the REIV is determined to work with Government, the Opposition and the Cross Bench to see that common sense and logic prevails.