Victoria’s Vacant Residential Land Tax is brought forward for homeowners

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The Victorian government has brought forward a new tax as its first initiative since Dan Andrews departed as Premier.

Treasurer Tim Pallas announced the surprise move at an industry breakfast on Tuesday, just one day after the state’s new leader Jacinta Allan was sworn in and her fresh cabinet was unveiled.

Victoria’s Vacant Residential Land Tax, a charge on homes that have been left unoccupied for more than six months, will be expanded to the entire state, including regional areas, from January 1, 2025.

Currently, only properties in Melbourne‘s inner and middle-ring suburbs are affected by the tax, which is charged at one per cent of the total value of the property.

Victoria’s Vacant Residential Land Tax, a charge on homes that have been let unoccupied for more than six months, will be expanded to the entire state, including regional areas, from January 1, 2025 (stock image)

Mr Pallas said the move would encourage landowners to develop land as Australia battles a housing crisis.

‘We can’t afford really to have vacant land in metropolitan Melbourne sitting idle for year on year,’ Mr Pallas said.

‘Our clear message to landowners is to either develop the land or sell it to someone who will.

‘Similarly we’re not putting in place a rule for landowners that we as a state are not going to apply to ourselves.

‘We expect every government agency that is holding land to justify exactly why they’re holding that land and not putting it in the marketplace.’

The tax is also set to be expanded again in 2026 to include land that’s zoned as residential that has been unimproved for more than five years in Melbourne suburbs.

The treasurer said that the tax currently collects $6 million a year and that this tax would be used to ‘amend behaviour’ as opposed to advantage the budget.

Former Premier Andrews announced the new 7.5 per cent levy on short stay rental providers, which aims to reduce the number of households leasing out homes to holiday makers over long term renters amid the housing crunch

‘We would much prefer not to get $1 out of tax that seeks to change behaviour. We’d prefer behaviour to change so that we can get people into homes,’ he said.

Victorian shadow treasurer Brad Rowswell has since hit out against the Labor government over the move.

‘Victoria is broke and Labor’s only plan for ‘economic growth’ is to tax Victorians more,’ Mr Rowswell said.

The change comes after the state government announced it will begin taxing those in Airbnbs and other short stay rental accommodation.

There are more than 36,000 short stay accommodation places in Victoria, 29,000 of which are entire homes.

Source: | This article originally belongs to Dailymail.co.uk