The Real Estate Institute of Victoria (REIV) has called on the State Government to modernise its property tax strategy after new figures revealed the number of new homes built in the state has slumped to a decade low.
Despite the government’s ambition to increase new home builds to 80,000 new homes per year, Australian Bureau Statistics (ABS) figures show only 55,653 homes were completed in the past 12 months, 2698 less than the previous year.
REIV Chief Executive Officer, Kelly Ryan, said current property taxes were a disincentive to investors and will likely hinder building the goal of 80,000 new homes per year.
She said the ABS data was concerning and the REIV was again calling for the Victorian Government to align its housing objectives with its taxation policies.
“We’ve got a great opportunity to build 800,000 new residential properties in the coming decade to ease our housing crisis,” Ms Ryan said.
“However, the latest ABS results highlight the importance of innovative and progressive thinking necessary to achieving this goal.
“We need policies that encourage investment to retain and grow our state’s property sector.”
Earlier this year, the REIV outlined it’s 2024-2025 Budget Submission to the State Government.
The first recommendation is for the Victorian Government to consider the introduction of new tax incentives for investors supplying long-term rental stock to the market.
This could be through a land tax concession for property owners who keep their property on the rental market for an agreed consecutive term, such as five to 10 years.
The REIV has also recommended a complete review of the state’s stamp duty regulations, including considering a complete replacement of stamp duty tax with a new structure that promotes mobility and supports economic activity.
The industry body would also like to see negative gearing retained in its current configuration.
“The REIV’s 2024-25 Budget Submission recommended the Victorian Government consider reconfiguring the state’s property taxation regime to attract investors such as tax incentives for rental providers supplying long-term rental stock, a comprehensive review of stamp duty, and the retention of negative gearing,” Ms Ryan said.
REIV’s full 2024-25 Budget Submission to the Victorian Government’s consultation can be found on reiv.com.au.
