By Anthony Webb
The Victorian Government’s recent announcement to increase property taxes has caused great concern for residential rental providers who, yet again, feel as though they are having to pay the price for government misspend.
The proposed taxes include:
- A 19 per cent increase in land tax on properties valued at between $1.8 million and $3 million, with the rate to increase from 1.3 to 1.55 per cent;
- A 13 per cent increase in land tax on properties valued at more than $3 million, with the rate to increase from 2.25 per cent to 2.55 per cent;
- An 18.2 per cent increase in stamp duty on a property’s value above $2 million, with the value up to $2 million to be taxed at the current rate;
- A new Windfall Gain Tax, which would apply from 1 July 2022, where 50 per cent of the value of uplift as a result of a rezoning (both local government and state government), as assessed by the Valuer General at the time of the rezoning, will be taken by the Government.
Source: Property Council Australia
After a tumultuous past 12 months with the moratorium on evictions and the amendments to the Residential Tenancies Act, it is understandable that residential rental providers are feeling overwhelmed and defeated with the latest proposed increases to stamp duty and land tax hikes.
Once again, these changes will be felt across the entire property industry. They will likely result in even more investment properties coming off the market, in turn decreasing the pool of rental properties and increasing prices.
These changes are pushing Victoria even closer to what feels like an inevitable rental crisis.
We want the government to support residential rental providers, who ensure there is a good supply and quality of rental options on the market, and urge them to reconsider their tax hikes which will hit residential rental providers, renters and developers hard after such a tough 2020.
If you would like to have a chat about the changes to stamp duty and how they may affect you, please reach out today.