23 Feb 2022
3 min read
23 Feb 2022
Last week the Victorian Government announced it 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”.
This new levy will be an additional cost payable by the landowner looking to develop or subdivide land under the proposed laws.
The new Contribution will be applied on the following types of properties:
Under the proposal, the contribution will apply to a planning permit that permits developments or subdivisions in the following areas:
The levy is 1.75% calculated on the market value of the property. On a $500,000 property this works out to be $8,750. With full Stamp Duty (without any exemptions or concessions) on a $500,000 property being $25,070, the total levy/duties payable, excluding any additional trust or other surcharges that may apply, is $33,820.
Recently, the Victorian Government has also wound back some of the land transfer duty concessions for investors buying off-the-plan properties. The combined impact on new developments could be significant.
Under the proposed legislation, the contribution is to take effect from 1 July 2024 if passed through Parliament and it becomes law.
Given the early start date of July 2024 this will no doubt impact some developments and projects already underway.
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 payments will be collected by the State Revenue Office of Victoria.
The Planning and Environment Act 1987 (the Act) included an objective “to facilitate the provision of affordable housing in Victoria”. This is aimed at providing housing for very low, low- and moderate-income households.
The funds will be allocated through a competitive grants process to Community Housing Agencies.
Funds can be allocated in different locations across the State.
The contribution is still at the proposal stage and the bill is expected to be introduced into Parliament in early 2022.
Housing affordability is a key issue for Victorians which affects more people than first home buyers trying to enter the property market.
Our property lawyers can help with a range of property law enquiries and assist if you need further clarification on how these new laws may impact you and your proposed development
Contact us on 1300 907 335.
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 PCL Lawyers and belong solely to the author of the content. © PCL Lawyers Pty Ltd.
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Marilyn Wai is a Senior Associate in the Commercial and Commercial Property Department. Marilyn studied law at Monash University and obtained a Bachelor of Laws and was admitted into practice in...
Chris is an Accredited Commercial Law Specialist and a Partner at PCL Lawyers. Chris has approximately 30 years’ experience in commercial and property law. Chris has extensive expertise in complex...
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