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

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

The Daniel Andrews government is reportedly exploring new ways to improve its bottom line after a similar proposed tax was scrapped last year following backlash.

It’s another blow to Victorians, according to data from the Australian Bureau of Statistics, as residents already pay most of the country’s taxes.

An average resident paid $5,638 to local and state governments in 2021-2022, compared to $5,537 paid by NSW residents and $3,952 by Queenslanders.

In the past fiscal year alone, the Andrews government and municipalities collected an additional $7.3 billion in land taxes, stamp duties, tariffs and other levies.

Mr Andrews confirmed last week that he was looking at a range of reforms in the construction sector, including a new tax, stripping councils of approval powers for major developments and requiring that some new construction be social housing.

The Victorian executive director of the Property Council of Australia, Cath Evans, said the government should be careful about new levies.

“The Property Council has made our position clear: The Victorian tax system needs to be reviewed to fully examine the impact taxes have on both the supply and affordability of housing,” she told the Announce sun.

“Any change in state tax settings should be aimed at stimulating economic growth and delivering new housing supply to an increasingly stressed market.

Last year, the Andrews government proposed an $800 million social housing tax, which would have imposed a 1.75 percent levy on developers building a development of three or more homes.

But after backlash from the real estate industry, which said it would add $20,000 to the median cost of a home in the state, 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 that affordable housing in Victoria has grown by just 74 units over the past four years under the Andrews government.

According to the DFFH report, as of June 30, 2022, there were 86,887 public rental homes in the state, up from 86,813 in June 2018

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

Victorians already pay more than any other state in taxes, with an average of $5,638 per person going to local and state governments in 2021-22

Victorian shadow treasurer Brad Rowswell claimed that the Victorians could cope with the effects of the Andrews government’s poor money management.

“It will only get worse if the Andrews government promises to be a horror state budget next month,” Rowswell said.

“According to the Andrews Government’s own figures, their tax revenue will rise by 14 per cent over the next three years, while property taxes will rise by 21 per cent over the same time.”

He said total state taxes are expected to rise to $35.6 billion between 2025 and 2026, up $17.3 billion from the 2014 figure.

“And young Victorians continue to struggle to enter the real estate market thanks to some of the highest stamp duty in the country under the Andrews government,” he added.

“As long as the Andrews government is in power, every Victorian will continue to pay more and get less because they simply can’t handle money,” he said.

The Victorian state budget is due May 23.