Victorian Budget 2018-19: A Budget of Missed Opportunities

Date: 4 May 18

Media Release

The Andrews Labor Government 2018-19 Budget unveiled this week has failed to deliver any tangible tax relief to property purchasers or investors.

Real Estate Institute of Victoria President, Richard Simpson said that “this Government is awash with money generated from property transactions and rising land prices across the state.”

“It is disappointing to note that the Government could not see fit to provide tax relief in the form of reductions in rates of Land Tax or Stamp Duty or indexation of thresholds when times are so good.”

Property taxes will account for over $11.5 billion of the state’s $24 billion tax revenue in 2018-19.  An increase of 7.5% over the revised 2017-18 estimates. 

“Despite a healthy take-up of the Stamp Duty concessions offered to first-time home buyers, the Government’s total take from Land Transfer Duty has increased this year and is projected to rise again in 2018-19, and every year over the forward estimates”

“Many property investors, including self-funded retirees, are struggling with the burden of rising land tax and the Government with the move to annual valuations, have forecast a massive increase in the Land Tax take of 23% for 2018-19.” Mr Simpson said.

 “We believe that lower taxes on land, and on real estate transactions, would incentivise investment and we cannot comprehend why or how the Government has missed this opportunity.

 “When the Government refuses to cut taxes at a time of Budget surplus, strong economic growth, Triple A credit ratings and a rapidly growing population, when will they be able to do it?”.

The REIV was also disappointed that the Government had made little provision for additional public housing in the Budget.

“Given low rental vacancy rates and rising rents across the state, the Government has missed an opportunity allocate more money to reduce the significant waiting list for Public Housing in the Sate.” 

“In this election year, the REIV will continue to urge both sides of politics to commit to a reduction on the reliance on Property Tax to fund the State’s initiatives.” Mr Simpson said.

The REIV supports the cuts to payroll tax in regional Victoria, while noting that many businesses may be too small to take advantage of this, however, it may encourage some larger businesses to relocate.

“REIV also welcomes the continued commitment to improving road and rail infrastructure. Access to efficient public transport, better roads and faster rail, as well as proximity to essential services are needed to support Melbourne’s continued outward march,” Mr Simpson said.