Daniel Andrews considers new property tax in major blow to millions of Victorians

Major blow for millions as Daniel Andrews considers adding a new tax despite Victorians already paying the most in the country

  • New tax being tossed up by the Andrews government
  • Recent data shows Victorians already pay the most tax

The Victorian government could slap millions of residents with a new property tax as it struggles to pay for its social and affordable housing scheme.

Daniel Andrews‘ government is reportedly looking into new ways to boost its bottom line after a similar proposed tax last year was scrapped following backlash.

It comes as a fresh blow for Victorians with residents already paying the most taxes in the country, according to data released by the Australian Bureau of Statistics.

The Andrews government is expected to introduce property industry reforms this year which could include hitting residents with a new tax to pay for its stalling social housing initiative

The Andrews government is expected to introduce property industry reforms this year which could include hitting residents with a new tax to pay for its stalling social housing initiative

An average resident paid $5,638 in 2021-22 to the local and state governments compared to $5,537 paid by NSW residents and $3,952 by Queenslanders.

The Andrews Government and councils collected an extra $7.3bn in land tax, stamp duty, rates and other charges in the last financial year alone.

Mr Andrews confirmed last week he was looking at a suite of construction industry reforms that could include a new tax, councils being stripped of approval powers for major developments, and requiring a portion of new builds to be social housing.

Property Council of Australia Victorian executive director Cath Evans said the government should be cautious about any new levies.

‘The Property Council has made our position clear – the Victorian taxation system is in need of a review to fully examine the impact that taxes are having on both the supply and affordability of housing,’ she told the Herald Sun.

‘Any change to the State’s tax settings needs to be aimed at driving economic growth and delivering new housing supply to an increasingly stressed market.

Last year the Andrews government proposed an $800million social housing tax that would have slapped a 1.75 per cent levy on developers building a project with three or more dwellings.

But after backlash from the property industry, who said it would add $20,000 to the median cost of a house in the state, Mr Andrews scrapped the tax within two weeks.

Despite the push for a social housing piggy bank, data from the Department of Families, Fairness and Housing revealed affordable housing in Victoria grew by just 74 units in the last four years under the Andrews Government.

The DFFH report said 86,887 social housing dwellings existed across the state as of June 30, 2022, up from 86,813 in June 2018

Across the same period, waiting lists for affordable housing quadrupled.

Victorians already pay more than any other state in taxes with an average of $5638 per person going to local and state governments in 2021-22

Victorians already pay more than any other state in taxes with an average of $5638 per person going to local and state governments in 2021-22

Victorian Shadow Treasurer Brad Rowswell claimed Victorians were copping the effects of the Andrews government’s poor money management.

‘It’s only going to get worse when the Andrews Government hands down what promises to be a horror State Budget next month,’ Mr Rowswell said.

‘By the Andrews Government’s own numbers, their tax take will rise by 14 per cent over the next three years with the land tax take set to increase by 21 per cent over the same time.’

He said the total state taxes were forecasted to rise to $35.6 billion by 2025 to 2026, rising $17.3 billion compared to the number in 2014.

‘And young Victorians continue to struggle to enter the property market thanks to some of the highest stamp duty rates in the nation under the Andrews Government,’ he added.

‘For as long as the Andrews Government is in power, every Victorian will continue to pay more and get less because it simply can’t manage money,’ he said.

The Victorian State Budget will be delivered on May 23.