Build-to-Rent land tax policy and green energy push announced by Victorian Government

Market Insights
3 years ago
2 minutes

In addition to stamp duty waivers of up to 50 percent, the Victorian government announced yesterday its $5.3 billion 'Big Housing Build' initiative, of which build to rent land tax changes were included. This aims to make more projects in the sector viable, with a 50 percent land tax discount available for eligible new developments until 2040. The Absentee Owner Surcharge will also be waived for developments over the same period.

The state says that the support for the build-to-rent sector aims to increase its supply of housing and options for renters.

It has also been confirmed that regional Victoria will receive 25 percent of the 12,000 new social housing package, which was announced earlier this month. Further good news for regional Victoria is the extension of the $20,000 First Home Owner Grant for those buying or building a new home, which applies to contracts of sale entered into until the end of June 2021.

In an effort to encourage business to set up in regional Victoria, a 50 percent stamp duty concession on the purchase of commercial and industrial properties will be brought forward to January 2021.

A statewide investment in clean every was also announced, totally $1.6 billion, which includes $682 million to develop Victoria’s Renewable Energy Zones — from the east coast to Mildura, and $448 million for home energy efficiency upgrades. 250,000 low-income households and 35,000 social housing properties will be covered by the investment.

$619 million has been allocated towards helping those out of work look for employment – the 'Jobs for Victoria' plan – which forms the centrepiece of its recovery plan.

The government has set a goal of creating 200,000 jobs by 2022 and 400,000 by 2025.

Experts estimate that Victoria's borrowing requirements in fiscal 2021 alone have risen by $20-$25 billion, as a consequence of the strict second lockdown.

“While record-low interest rates will enable the state to absorb such a sharp rise in debt, borrowings will remain elevated for an extended period of time and significantly constrain Victoria’s operating profile over time,” Moody’s vice president John Manning said.

“In turn, this will test institutional capacity as the state targets fiscal repair over an extended period of time.”


For more market insights, click here.