A Windfall Gains Tax, due to be debated in the Victorian Parliament on Monday (25 October) would place another barrier in the way of providing much-needed homes and could snuff out population growth in rural Victoria, Rural Councils Victoria has cautioned.
Rural Councils Victoria Chair Cr Mary-Ann Brown said:
“The Windfall Gains Tax (WGT) is designed to tackle a specific Melbourne problem but will have unintended negative consequences in rural areas.”
“Unlike in the city where massive firms are involved, development in rural towns is mainly undertaken on a small scale by families who have owned the land for a long time. They often don’t have experience in property development and might not have the money to pay this new tax. This means that they will simply not develop the land.”
“RCV and the State Government have been keen to see rural towns grow. As a result of COVID, many rural areas are finally experiencing some population growth and this tax could easily snuff out that growth.”
“Rural Victoria already faces many barriers to increasing housing supply,” Cr Brown said.
“Utility connection costs for gas, water and electricity are already significantly higher than in Melbourne, the WGT on housing development will further discourage rural landowners and developers to build new houses and apartments.”
“The WGT is designed to address an issue in Melbourne, but makes an existing problem in rural Victoria even worse.”
“The tax is likely to lead to an increase in property and housing prices making it hard for locals to buy into the towns they grew up in.”
“The WGT will reduce the ability of councils to reach agreements with developers to make a contribution to important local infrastructure and projects, this will be a real loss for rural communities.”
“Rural Councils Victoria is not against the tax,” Cr Brown said, “but we do need a mechanism to mitigate its negative effects on rural housing developments. Revenue created by the tax should be spent in the rural communities where it was raised.” “At a time when the rural population is growing, it is imperative to ensure that people have the safe, affordable, well-serviced and good-quality homes they deserve.”
