IT SEEMS the Victorian Labor Government is hell bent on committing electoral suicide.
How else could you explain the Government's decision to apply a vendor tax of $80,000 to $95,000 a hectare on all land brought into the urban growth boundary?
- $95,000/ha rezoning tax slap
- A rich asset, a huge liability
- Have Your Say now in the form below
The tax will hit thousands of landholders in key ALP and marginal electorates in the lead-up to the 2010 election.
Thousands of landholders within the existing boundary will have to pay the tax if they sell or develop their properties. Then there's at least another 2675 landholders, whose rural properties are being reviewed as part of a boundary extension.
Anyone with more than 0.4ha will have to pay the tax when they sell.
No sane person would dispute land values rise dramatically when rural land is rezoned for urban use.
And most people would not oppose developers making a significant contribution to the cost of extending and upgrading roads, public transport systems and other infrastructure to new urban developments that deliver healthy profits.
But whacking a flat tax of $95,000 a hectare on every block of rezoned land that is put on the market is an absurd piece of logic.
Applying a hectare-based tax assumes all land within the urban boundary is worth the same amount.
What about the landholder who must pay $95,000 a hectare, yet half his property sits under high-voltage power lines, is on a flood plain or includes protected remnant bushland?
What about the small landholder who wants to sell, but is surrounded by other 2ha block owners who are happy to stay put? No developer is going to find small isolated blocks attractive.
What about the landholder whose land is right on the edge of the new boundary and must wait a decade or more before developers take any interest in their land?
Landholders face being marooned on their blocks for years to come.
Local campaign groups are already being formed to fight this vendor tax and the Liberal Party is salivating at the prospect of it becoming an election campaign issue.
So why isn't the Government collecting the infrastructure costs from developers, based on the final sale of residential developments?
Is it simply a matter of the Government trying to earn a quick buck?
