Vic Tax Hike Release
24 May 2021
Released for: Property Funds Association
Released by: Manallack PR phone 0407 334 938
Vic property tax proposals a missed opportunity: Property Funds Association
Property Funds Association says the Victorian state government’s plan to introduce higher property taxes could be a missed opportunity to stimulate Victoria’s economy by encouraging more property activity.
Paul Healy, CEO of Property Funds Association (PFA), said PFA cannot support measures which add to the costs of doing business for unlisted property funds investing in Victoria.
“Commercial property development will be key to Victoria’s ongoing recovery from COVID-19 lockdowns.
“Commercial property activity also provides major investment opportunities for a wide range of investors from large superannuation funds to individual investors, family trusts and self-managed super funds, all of which further benefits our economy.
“PFA can’t support tax increases which add to the costs of buying and selling property, which could impact rental income, and which may diminish the feasibility of some projects.”
The most concerning increases according to the PFA include the proposed increase in land tax on holdings worth more than $1.8 million, and the windfall gains tax on rezoned land, which imposed a 50 per cent tax on gains of $500,000 and above (land under Victoria’s Growth Areas Infrastructure Contribution is to be exempt).
PFA says it is not clear how the extra costs will be absorbed, whether by commercial landlords, tenants, or the end investors. “There is potential for slower rental growth, as tenants find their costs increase. In cases where landlords cannot pass on the extra costs, they will face a drop in net income.
“Unlisted property funds have been a strong driver of economic activity in Victoria, and meet investors’ demands for income-producing investments in a low interest rate environment.
“However, it is unclear how increased taxes on this activity benefits owners, tenants, ordinary investors, or Victoria’s economic recovery”, Mr Healy concluded.
About Property Funds Association
The Property Funds Association of Australia is the peak body representing the Australian unlisted wholesale and retail property funds sector.
As the professional association for Australian Financial Services Licensed (AFSL) property fund managers, their advisors, consultants and representatives, we support and promote investment into unlisted property trusts, funds and syndicates, and assist members in developing and operating their businesses.
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For more information please contact:
Property Funds Association
Phone: +61 3 9614 0600
Phone: 0407 334 938