The Victorian government’s policies, regulatory reforms and property taxes have more than 80 per cent of the state worried about their part of the housing market.
The vast majority of Victorians now believe the state’s property taxes and regulations are turning landlords away from the state, and costing renters the chance to buy a home.
Industry groups are calling for the housing crisis to be scrapped as a political issue and to become a bipartisan matter to avoid the issue being consistently looked at in three-year increments, which was worsening the crisis.
Independent research commissioned by the Real Estate Institute of Victoria, carried out by Lonergan Research, has found 81 per cent of the more than 1000 respondents surveyedbelieved current tax and regulatory settings were “discouraging investment”.
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Meanwhile, 86 per cent of renters believe they would be able to buy a home if it were not for stamp duty costs, with those in Melbourne even more likely to see the need for the tax to be changed or removed.
Melbourne’s median house price has moved back into record territory this year, returning to more than $1m.
It means that more than half of the city’s houses now sell in the top two brackets for stamp duty payments — including a $960,000 bracket that was set as the state’s absolute top threshold for the tax in 2008 with a 5.5 per cent payment to the government.
Former Victorian premier Daniel Andrews increased the state’s top threshold for stamp duty tax — but made no change to the former top bracket despite it coming to represent a typical Melbourne family home. Picture: Asanka Ratnayake/Getty Images.
The figure has not been reduced as prices have surged subsequently, with the Andrews government instead implementing a new, higher tax rate of 6.5 per cent for purchases above $2m in 2021.
Further findings included that 58 per cent of landlords don’t feel they are being adequately supported by the government, especially those in regional areas, and 56 per cent are considering selling their investment if the government doesn’t make changes to current settings.
Almost 60 per cent added that if targeted incentives were put into place in the state that they would consider increasing their investment.
REIV chief executive Toby Balazs said the survey should be a “really strong call to action” for the government.
“They need to look at the policy settings and the regulatory burden being allocated to Victorian rental providers, and renters who want to buy a home as well,” Mr Balazs said.
“There needs to be a change from the current tax settings, which are disincentivising. They need an environment that encourages investment and for Victoria.”
REIV chief executive Toby Balazs is calling for urgent tax reform for the property sector in May’s Victorian state budget.
They are calling on the Allan government to review the state’s regulatory requirements, but especially its tax settings, as it considers the budget for May.
Mr Balazs said the current $750,000 cap on stamp duty support for first-home buyers in particular needed to be reworked.
He added that removing the politics from the issue was becoming an increasingly important facet of addressing the housing issues faced by Victorians.
Real Estate Buyers Agents Association of Australia Victorian representative Matthew Scafidi said with government’s thinking in three-year election cycles, there wasn’t enough time to “fix anything”.
Mr Scafidi said it was clear the government’s latest policy settings were responding to push back from renters, but noted that so far they had failed to address the reason behind rising rents — which was new housing supply not keeping up with population growth.
Both renters and landlords are struggling with the trajectory of the state’s housing policies.
At present, the buyer’s agent said the tax regime in Victoria disincentivised both homebuyers and investors — which was hurting the ability for the true issue of housing supply to be addressed.
“It needs to be gloves off, let’s just sit down and fix this issue,” Mr Scafidi said.
“If this was a business, they wouldn’t have hit one KPI (key performance indicator) — but they are warm at night and have a home to go back to … and there’s a lot of people who are struggling and that’s an absolute shame.”
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