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In its submission to the 2024–25 Victorian state budget, the Real Estate Institute of Victoria (REIV) has stressed the need to attract and retain property investors in the state.
Urging the Victorian government to focus on increasing overall housing supply, the REIV believes this would be best achieved through a switch up of the state’s property tax regime, proposing three key ways this could be achieved.
REIV president Jacob Caine shared the belief that the Victorian government “must reconfigure its property tax policy using principles that make Victoria an attractive state for investors”.
He said: “It’s time the Victorian government reconsidered several comfortable yet outdated taxes like stamp duty and instead adopted fit-for-purpose tax measures that will drive investment and give more Victorians a roof over their heads.”
Arguing that the state needs a tax regime which positions Victoria as a more competitive place to invest in a bid to increase housing supply, Caine said that while the REIV is welcoming of recent commercial and industrial property policy effort, “more must be done in residential property to bolster housing supply.
Here are the three main points within the REIV submission:
- Improve incentives for long-term landlords
REIV has requested the government consider the introduction of new tax incentives for investors who can supply long-term rental stock to the Victorian market.
Practically, this could be a land tax concession for property owners who choose to keep their property on the rental market “for an agreed consecutive term, such as five to 10 years”.
According to the institute, “these long-term rental supply incentives are likely to have greater impact than recently announced levies on vacant land and short-stay accommodation”.
- Complete review of stamp duty regulations
The REIV is also urging the government to undertake a complete review of stamp duty, “including considering a complete replacement of stamp duty tax”, with a new structure that would promote mobility and support economic activity.
- Retain negative gearing
Once again, the REIV has raised their own view that “negative gearing plays an important role in incentivising investment in the state’s rental market, and its removal would lead to further destabilisation of the rental market and removal of stock”.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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