BUYERS, not sellers, of land within Victoria's urban growth boundary will be hit with the State Government's new $95,000/ha infrastructure tax.
The tax was to apply to vendors, but Planning Minister Justin Madden announced last week he had shifted liability on to buyers in response to landholder anger at being left with multi-million dollar liabilities once they sold out to developers.
"Under the draft legislation ... the GAIC will apply to those who profit from subdividing and developing land brought into the urban growth boundary," he said.
"We believe this is the fairest way to help pay for the infrastructure needed by families who will move to some of Melbourne's newest suburbs."
But rural landholders have dismissed Mr Madden's fairer proposal as meaningless, saying they still face being trapped on their land, unable to sell to anyone but a developer.
Taxed Out spokeswoman Jeanette Laffan said the Government had brought 20 years' supply of land into the urban growth boundary, which meant many landholders would have to wait years before being able to sell to developers.
"If you have a lifestyle block you won't get any windfall gain when you sell it," she said.
"In fact, a lot of landholders would be better off just handing their land over to the Government and walking away."
Taxed Out chairman Michael Hocking said the group maintained the only fair and equitable trigger point for the tax was imposing it on developers once they were granted a planning permit for development.
"How can anyone on small acreage attract a purchaser with that sort of liability attached?" Mr Hocking said.
"Certainly no family wishing to live on a few hectares will take on this added liability when they can purchase property outside the UGB without this headache.
"That leaves only developers in the market. When you remember development in the investigation areas will not commence until 2019 even developers will not be interested in property for 10 years."
The Government is seeking public comment on the draft legislation until November 2.
