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New Proposed Levy To Be Applied To Some Subdivisions

The Proposed Social and Affordable Housing Contribution in Victoria Explained.

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:

  • New developments of three or more dwellings; or
  • The subdivision of land that results in three or more new residential lots.

Under the proposal the contribution will apply in the following areas:

  • Metropolitan Melbourne
  • Greater Geelong
  • Ballarat
  • Greater Bendigo

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 Will The Contribution Be Paid?

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.

 

How The Government Proposes To Use The Funds.

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.

 

What Developers Are Saying…

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.

 

 

Disclaimer: This article has been prepared for general information purposes and may not apply to your situation. This information should not be relied upon for legal, tax or accounting advice. Your individual circumstances will alter any legal advice given. The views expressed may not reflect the opinions, views or values of Conveyancing Depot and belong solely to the author of the content. © Conveyancing Depot Pty Ltd.

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Here at Conveyancing Depot Lorilea is our Marketing Manager. She has a bachelor's degree in...