Victorian Treasurer Tim Pallas has foreshadowed that this Thursday’s state budget will include a number of tax hikes that will hit property investors the hardest. Last week, Mr Pallas announced the following state tax increases will be included in the state budget as a measure to recover lost revenue:
Land Tax To Rise From January 2022
Land tax will rise by 0.25 percentage points for taxable landholdings worth $1.8m – $3m and by 0.3 percentage points for taxable landholdings above $3m.
Stamp Duty ($761m over four years from July 2021)
Property transactions with dutiable value above $2m will be subject to a “premium” duty rate of 6.5 per cent.
New Windfall Gains Tax ($124m over four years from July 2022)
Developers and speculators will face a windfall gains tax of up to 50 per cent applied to planning decisions to rezone land from 1 July 2022, ensuring multi-million dollar overnight profits are shared with the community.
The total value uplift from a rezoning decision will be taxed at 50 per cent for windfalls above $500,000, with the tax phasing in from $100,000 – ensuring the vast majority of land holders will not be affected. Land subject to the Growth Areas Infrastructure Contribution will also not be affected.
Fines and Fees ($251.6m over four years from July 2021)
Penalty units rise 10 per cent from $165.22 to $181.74 on traffic infringements and court-imposed penalties.