THE Coalition has moved defer Labor's controversial up-front payment of the Growth Areas Infrastructure Contribution.

Planning Minister Matthew Guy introduced a Bill to Parliament last week that dumps the previous Labor Government's requirement that anyone buying more than 10ha within Melbourne's new urban growth boundary must pay 30 per cent of the GAIC tax up front.

Under Mr Guy's amendment, buyers will be able to defer paying all $95,000/ha until the land is developed.

Mr Guy said the introduction of the Planning and Environment (Growth Areas Infrastructure Charge) Bill 2011 would allow for 100 per cent deferral of the GAIC to the end of the subdivision process, and provide for in-kind work agreements as part or full payment of the GAIC.

He said the Coalition Government reforms would reduce developer holding costs and place downward pressure on housing affordability, as well as enabling some infrastructure in growth areas to be brought forward.

Mr Guy said all funds raised by the GAIC would be used to provide vital infrastructure and to oversee development in Melbourne's growth areas.

The chairman of landholder group Taxed Out, Michael Hocking, said Mr Guy's amendment marked the end of a two-year battle by landholders against Labor's tax.

"Since Labor announced its up-front GAIC policy in December 2008, Taxed Out members have witnessed properties failing to sell, contracts of sale falling through, and mortgage finance refused," Mr Hocking said.

He said some landowners had unwittingly triggered the GAIC and owed the State Revenue Office hundreds of thousands of dollars.

"None of this would have occurred if Labor had listened to community concerns," Mr Hocking said.