Victorians blame government property taxes for housing pain

THE Property Council of Australia believes urgent stimulus is needed to bring Victoria’s housing market back from the brink and get more homes built.

New polling reveals four in five Victorians (80.7 per cent) blame the Victorian Government’s 32 new and increased property taxes since 2014 for hurting household budgets and pushing up the cost of owning or renting a home.

The Property Council-commissioned poll of 3863 Victorians found 88 per cent of respondents are concerned about housing affordability, under the heavy shadow of a high-taxing Victorian Government.

Two-thirds of respondents believe reducing taxes and charges would encourage more private investment in housing, while more than 40 per cent identified taxes and charges as a key barrier holding back housing supply.

§ Calls for housing tax relief and buyer stimulus

Matthew Kandelaars, Property Council group executive policy and advocacy, said the findings highlight an urgent need for housing tax relief, including:

• Abolishing the supply-killing Absentee Owner Surcharge in full, which currently penalises Australian builders who partner with capital from overseas, including Dutch or Canadian pension funds, to build Australian homes.

• Abolishing the Windfall Gains Tax, which slugs a 50 per cent tax on anyone with the desire to turn non-productive land into new housing opportunities.

• An immediate housing stimulus package to support Victorian homebuyers – eliminating stamp duty on all new builds, a $25,000 downsizer bonus, and increasing the first home owner grant to $20,000.

“With its overspending and record debt, the government has become addicted to taxing the sector responsible for delivering the homes Victoria needs,” Kandelaars said.

“Victorians aren’t stupid and four in five recognise that the government’s 32 new and increased property taxes since 2014 are squarely to blame for their housing pain.

“The government has had its hand in the pocket of homebuyers and renters for the past 12 years, and Victorians know it.

“The state’s punishing property tax burden is hurting Victorians, driving away investment and stalling new housing projects.”

§ Weak demand stalls Victoria’s housing pipeline

Kandelaars said urgent stimulus was needed to break the cycle and restart Victoria’s housing pipeline because the state’s crippling tax environment has left it in a dangerous position.

Demand is non-existent in a falling knife market, meaning new supply has stalled.

“We’re facing a dangerous double whammy. Buyers are sitting on the sidelines and developers can’t justify starting new projects," Kandelaars said.

“When buyers disappear, pre-sales dry up, banks won’t finance projects and construction grinds to a halt.

“No buyers means no projects. No projects means no new homes. It’s that simple.

“Victoria’s housing market is on life support.

"Demand stimulus to help buyers, while abolishing taxes that hurt supply, is the urgent defibrillator double-shock that is our only hope of bringing it back from the brink.”