Victoria’s Opposition has criticised new measures to monitor holiday homeowners as part of the state government’s latest tax.
The new changes introduced by Victorian Treasurer Tim Pallas in early October will see the vacant property tax expand statewide and include land waiting to be developed.
Currently, the tax only applies to empty residential homes that have been unoccupied for more than six months a year across the inner and middle suburbs of Melbourne.
Owners need to pay one percent of the property’s capital improved value (CIV) of taxable land. For example, if the taxable land has a CIV of $500,000, the tax is $5000. The CIV of a property is the value of the land, buildings and any other capital improvements made to the property as determined by the general valuation process. It is displayed on the council rates notice for the property.
In addition, those who own land in established areas of metropolitan Melbourne will also be forced to pay land tax from 2026. This land tax, which is different to the Vacant residential land tax, applies to investment properties, holiday homes, commercial properties or vacant land.
‘Another Hit On Victorians’
Meanwhile, Victorian Shadow Treasurer Brad Rowswell on Oct. 12 said a new vacant property tax for holiday homes is underway, and will see owners of holiday homes asked to prove their use of the property or be forced to pay tax.
Currently, owners of holiday homes are exempt from the tax if they stay in the property for at least four weeks a year or for at least 140 days a year for work purposes. Exemption also applies when ownership of the property changes hands within 12 months.
Mr. Browswell noted that under the new measures, the government will examine the water and sewerage usage of holiday homes to find out how often homeowners visit the property. Holiday homes owned by a company or a trust are also not exempt.
Mr. Rowswell criticised the latest tax as “yet another hit on Victorians who are having to pay more and more for Labor’s mismanagement.”
“With more than 50 new or increased taxes and charges since coming to government, Victorians are now paying the highest state taxes in the nation,” he said.
Meanwhile, Shadow Minister for Planning James Newbury accused the government of “spying on how Victorians use their holiday homes.”
“Jacinta Allan and her Government have confirmed they intend to monitor how you use your holiday home and even encourage neighbours to dob you in if you don’t meet usage requirements,” he said.
About 600 Extra Homes To Be Affected
Assistant Treasurer Danny Pearson has previously confirmed the State Taxation Acts and Other Acts Amendment Bill 2023 may contain up to 12 new taxes.Mr. Pallas said he expected the expansion of the residential land tax will affect about 600-700 extra homes, and create about $6 million in revenue each year.
“We can’t afford really to have vacant land in metropolitan Melbourne sitting idle year-on-year,” he told a Property Council breakfast.
“Our clear message to landowners is to either develop the land or sell it to someone who will.”
“This is a very modest measure,” he said.
The industry has responded negatively to the move. Cath Evans, the executive director of the Property Council’s Victorian division, said she was shocked by the new tax and said the government didn’t consult with the industry about the change despite recently being in an affordability partnership with the industry.
“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,” Ms. Evans said.
“There has not been good faith in the execution of the agreement to date.”
