Property industry figures warn Victoria’s vacant land tax tweak will add pain to developers already struggling to start construction due to high input costs.
Victorian government tax changes designed to force companies to either develop or sell vacant land they hold will add financial stress to an industry already struggling with material and labour shortages and rising costs, industry figures say.
He said many developers are struggling to make projects work due to rising interest rates, ballooning supply and labour costs, stagnant land prices and because people are increasingly “spooked” by the idea of buying off-the-plan due to the number of builders going bust.If developers choose to sell instead, all their holding costs and future value potential subject to council approval would need to be built into the sale price.
Reducing impediments to development projects by importing skilled labour, subsidising building costs, guaranteeing bank loans or contributing equity was a better strategy than relying on “lazy taxing”, he said. Mr Pallas, revealing the changes to the Vacant Residential Land Tax on Tuesday at a Property Council function, said the government’s message to the holders of idle sites was “develop the land or sell it to someone who will”.
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