Industry unhappy with new property tax amendments

The government of Victoria has proposed several amendments to the state’s property taxation laws.

New amendments explained

Under the amendments, the revenue office hopes to expand vacant residential land tax to all vacant residential land in Victoria from the 2025 tax year. The amendments also expand the definition of vacant residential land to include unimproved residential land that has been unimproved for five years or more in established areas of Melbourne.

While this measure aims to address the issue of housing affordability and encourage more efficient use of land, it may pose challenges for property owners who have legitimate reasons for keeping their properties vacant.

The amendments will prohibit land tax apportionment between a vendor and a purchaser under a contract of sale from January 2024. It will prohibit windfall gains tax from being passed onto a purchaser under a contract or option agreements from January 2024.

Industry response

The Real Estate Institute of Victoria (REIV) responded that these new measures will only further exacerbate the exodus of rental providers in the state by making the state unattractive to property investors.

“It will create more uncertainty in investment at a time when the participants in the sector are crying out for consistency and commonsense and concepts that inject more confidence into real estate regulation,” said REIV chief executive Quentin Killian.

Freya Southwell is a property lawyer and principal of Sutton Laurence King Lawyers.

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