New tax hurts regional Victoria at the worst time
The Victorian Farmers Federation (VFF) says the new Victorian Government’s windfall gains tax which passed parliament this week will hurt regional Victoria and farmers.
VFF President Emma Germano said that despite the VFF’s best attempts to secure protections for regional communities, the new tax on rezonings would slow housing development with flow-on effects for farmers.
“This tax couldn’t come at a worse time for regional Victoria which is suffering from a housing crisis. Across all industries there are job vacancies, because we don’t have enough houses for working families to live in.”
“This is having a particular impact on farm businesses where we have been feeling the effects of worker shortages since well before the COVID-19 pandemic hit.”
“The tax will hurt regional Victoria because in the attempt to avoid it, developers will look to invest either in outer metropolitan Melbourne or interstate.”
Ms Germano also described the new tax as being a tax on farmers who are wanting or may be forced to sell their land.
“Farmers who have planned for their retirement, or who have been caught out by urban sprawl and are forced to sell their property will still have to pay this tax. For a farmer looking to relocate their business, that’s particularly unfair and could lead to them having to leave agriculture altogether.”
Ms Germano said the Government had also failed to explain how the tax might affect any Commonwealth capital gains liability.
“Typically, the Australian Taxation Office allows for land taxes to be added to the cost base of land, which in turn decreases the amount of capital gains tax paid when the land is sold. In bringing in a new tax, the Victorian Government had a responsibility to describe how it would interact with capital gains to ensure landowners aren’t being double taxed. But they refused to give any answers.”
“That is why I have written to the Federal Assistant Treasurer and Minister for Housing Michael Sukkar seeking clarification over how this new tax will be treated when calculating capital gains tax liabilities.”
“We are also asking the Commonwealth Government what action it is proposing to help fix Victoria’s regional housing crisis. This is a serious issue that requires all governments, communities and industry to work together to find solutions.”