Property a missing piece in state budget release
Date: 6 May 22
OPINION EDITORIAL
Published in the Herald Sun on Friday 6 May 2022
Quentin Kilian, CEO of Real Estate Institute of Victoria
There’s a lot less heat in the reaction to this year’s State Budget compared with last, especially when it comes to property sector investment, policy and taxation.
Perhaps it’s due to the shadow of a looming federal election, or from the prevailing negative narrative on rising costs of living and interest rates.
Or maybe it’s because there were no more increases in property taxes for participants in the sector, which is a welcome outcome following last year’s $2.4 billion tax grab.
Whatever the reason for the benign budget response, policy makers and elected representatives shouldn’t escape scrutiny and need to be reminded about what’s good for the millions of Victorians investing, renting and working in a one of the state’s strongest sectors.
Housing affordability is a perennial issue that will never be solved so long as a tired stamp duty tax ensues, and housing supply doesn’t keep up with demand.
The stamp duty lump sum payment can often equate to up to half the annual income of the average Victorian, putting stress on homebuyers to find thousands of dollars on top of their home deposits or moving costs. In fact no-one escapes stamp duty – not first-homebuyers who find their property dreams are actually out of reach, nor downsizers or ‘required-changers’ who are slugged with high-changeover costs.
Last financial year, Victoria collected more than $6,424 million from stamp duty tax and this year a 22 per cent increase is predicted. Land tax revenue is also expected to increase by 14 per cent this year. Since last year’s budget forecast, a further $3.3 billion in property tax revenue has been raised, underlining how significant a contributor the real estate sector is to the state’s coffers.
The property sector is overdue for meaningful tax reform and a more contemporary approach.
It’s a fundamental piece of state-interest work that will help ensure all participants in the sector – first homebuyers, owner-occupiers, investors and renters – can move forward with confidence.
The REIV stands ready to join political, business and community leaders in this important task. The benefit will come when Victoria is genuinely seen as an attractive destination for property investment and housing affordability and access.
Anything less puts at risk our strong foundation, which will harm job creation and the economy more broadly.
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