The Victorian Government is proposing a new Social and Affordable Housing Contribution.
The government’s aim of the contribution is to “deliver social housing projects for Victorians who need them most”.
The contribution is still a proposal and the bill is expected to be introduced into Parliament in early 2022.
The new Contribution of 1.75% of the market value of is applicable to:
Under the proposal the contribution will apply in the following areas:
It is proposed to take affect in July 2024. This will impact some land and housing developments already underway.
Under the proposal the land owner undertaking the development is liable to pay the contribution.
When the payment is due is outlined below.
For a development:
Payment will be required prior to the issuing of a building permit.
For a subdivision:
Payment will be required prior to the issuing of a statement of compliance.
The State Government is proposing to allocate the funds through a grants process to Community Housing Agencies.
Funds can be allocated in different locations across the state.
There is concern that first home buyers who are typically the buyers of new land developments will end up paying as developers are forced to pass on the cost.
Media outlets have reported that, developers are concerned that the contribution will impact the viability of developments already in planning stages. Due to the long timeframes of property development and the soon arrival of this levy developers haven’t factored this contribution in to their costs.
There is also some that are arguing it will devalue the price of land as developers will cost projects accordingly and offer less for land.
Whatever the outcome, we hope there will be a balance struck to help resolve the affordability issue and first home buyers enter the property market.
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