Victoria to expand vacant-residential land tax

During Jacinta Allan’s first day as premier, Victoria’s treasurer announced an increase in taxes on empty residential land, which sent shockwaves across the property business and even among some of his colleagues. The announcement came on the first day of parliament since Allan took office as premier.

Tim Pallas stated on Tuesday, during a business breakfast, that he expected to propose legislation to parliament this week, which will see the unoccupied residential land tax increased to include the entire state beginning on January 1, 2025. This expansion is scheduled to take place.

At the moment, the tax is only levied on residential properties in Melbourne’s inner and middle suburbs that have been unoccupied for at least six months. The rate of the tax is one percent of the overall value of the property, which takes into account any structures that are located on the land.

In addition, beginning in the year 2026, a new tax will be imposed on residential land that is either unoccupied or has been left unimproved for at least five years in established sections of the metropolitan area of Melbourne.

During a breakfast event hosted by the Property Council, Pallas stated that “We can’t really afford to have vacant land in metropolitan Melbourne sitting idle year after year.”

“Our message to landowners is that they should either develop the land themselves or sell it to someone who will develop it,”

According to Pallas, all of the land owned by the government will be subject to the same requirements.

Cath Evans, the executive director of the Victorian division of the Property Council, stated that she was “shocked” by Pallas’ comments. She also observed that the government did not mention the idea when it jointly inked an affordability partnership with the sector just two weeks ago. Cath Evans is the executive director of the Property Council’s Victorian division.

“Industry went into this partnership in good faith with the understanding that there will be consultation on any reforms going forward that affect the availability of housing stock,” said Evans. “This partnership was formed in good faith.”

“Up to this point in the process of carrying out the agreement, there has been no evidence of good faith.”

When he arrived in parliament on Tuesday morning, the assistant treasurer, Danny Pearson, stated that he was “not across” the idea.

During her first question time as premier, Allan refuted suggestions made by John Pesutto, the head of the opposition, that Pallas had similarly taken her by surprise. Allan said that she was not surprised by Pallas.

“Of course I was aware,” she stated, stressing that the legislation will be marked off at cabinet on Monday, and that it would be presented to parliament later this week. “Of course I was aware.”

While speaking to the media, Pallas stated that he felt it would have been dishonest for him to appear at the event hosted by the property council without first revealing his intentions to propose the additional taxes later this week.

“I know that avoiding that unpleasant conversation would have been for a much healthier breakfast for me – a little less tense,” Pallas said. “I know it would have been for a much healthier breakfast for me.” “But I also think it’s a fair thing to do – to look people in the eye and tell them why you’re doing what you’re doing,” she said. “But I also think it’s a fair thing to do.”

Pallas anticipates that the expansion of the tax will have an impact on approximately 600–700 additional properties, resulting in approximately $6 million in revenue yearly. A vacation property that is used by only one family will not be affected by the modifications.

“This is a very modest measure,” he remarked after taking it.

According to Pallas, the second adjustment was made to reduce the incentive to engage in long-term land banking.

Just one week after Daniel Andrews resigned his position as leader of the parliamentary assembly, Allan quietly took her seat in the leader’s chair in the assembly on Tuesday afternoon with little notice.

Speaker Maree Edwards informed the House of Representatives that she had formally accepted Andrews’ resignation, which was met with a muted applause of “hear, hear” from members of the Coalition.

When Edwards first referred to Allan as the “premier,” Labor MPs applauded her and gave her a round of applause as a show of support.

On the other hand, the Allan government’s first piece of proposed legislation on Tuesday was an additional bill that would restrict the number of hours that gambling establishments might be open.

To comply with the law, which won’t go into effect until the middle of 2024, the gaming machine sections in all venues, with the exception of Crown Casino, will be required to close between the hours of 4 am and 10 am.

This modification was one of several that were announced by Andrews in July, and they include a new load-up ceiling of $100, required pre-commitment limits, and carded play. The reform was a component of these reforms. At the time, he asserted that the amendments would result in Victoria having the most stringent regulations against electronic gaming and anti-money laundering in all of Australia.

Allan stated that the revisions would address evidence that some establishments were staggering operating hours in order to encourage customers to migrate between establishments that were located close.

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