Landlords in Victoria have been incensed by the state budget’s 10-year increase in land taxes.
The state budget was presented by Treasurer Tim Pallas yesterday, who described it as unquestionably “the most difficult” in his nine-year tenure. The budget aims to put Victoria’s finances “back on track by 2033.”
The decision to increase land tax, which will have an effect on over 900,000 taxpayers, was a significant component of the budget.
Premier Daniel Andrews insisted that the tax would not cause rents to increase, arguing that it was a better way to manage debt than to put off any significant initiatives.
Because the massive project was approved by voters and is sorely needed right now, he declared, “We are not cutting it.”
Any land tax is totally deducted from taxes.
However, irate family investors pounded talkback radio this morning in frustration.
Sue explained to 3AW that in order to keep our current home, we had to increase the rent.
“We are a hard-working people who work hard.”
Elinor Kasapidis, Senior Tax Policy Manager for CPA Australia, stated today that many Victorians would be impacted.
“(Landlords) were absorbing the rent decreases, they were helping out their tenants, and with the recent interest rate rises, those mortgage repayments are really biting,” she said.
“The one percent tax is not the issue. Australians of the middle class who are making investments for the future will be severely harmed by this.
Pallas said the government wouldn’t enact a complete rental freeze but left the option of limiting how much landlords can raise rent open in addition to the land tax rise.
Let’s consider it, he said.
There must be a point at which the community declares that this has gone beyond reason, though we don’t have a solid opinion about it.
In an effort to increase the availability of rental housing for tenants, Andrews also suggested that improvements might be made.
“Supply is the issue (causing high rents),” he said. “You’ve got estate agents and some landlords basically running an auction for a rental.” Anyone applying for a rental will find that they are one of 25 or 50 different applications.
“They can tell you that the supply is insufficient, so we need to make better decisions and do so more quickly,”
The COVID Debt Recovery Plan, which will target the state’s large corporations, was the main emphasis of the budget.
According to the treasurer, it will drain an additional $8.6 billion from companies over the following four years.
John Pesutto, the leader of the opposition, claimed that the tax will specifically target hard-working, impoverished Victorians.
He described it as “mean and nasty” and claimed that it both targeted wealthy residents as well as those with middle-class and lower incomes.
Pallas characterized the scheme as “temporary and targeted” and claimed that young Victorians “who’ve made enough sacrifices” will gain from it.
Despite the challenges, Pallas remarked, “we won’t absolve ourselves from our obligations to the community.”
