May’s Victorian Budget implemented a new windfall gains tax for properties whose value is boosted by a council rezoning. This tax will apply to properties where the value is boosted by more than $100,000, with a 50% tax on windfalls above $500,000.
The clearest indication that this windfall tax is good policy has come from the Urban Development Institute of Australia’s (UDIA) opposition, with the CEO of the UDIA’s Victorian branch, Matthew Kandelaars, calling for an urgent review of the windfall tax.
Modelling funded by UDIA Victoria claims the rezoning tax will reduce state economic output by $7 billion and result in the loss of 20,000 direct jobs, while at least 6,700 dwellings will not be built if the Budget measure goes ahead:
