The Property Council has welcomed the Victorian Government’s changes to the Absentee Owner Surcharge (AOS) guidelines as a step towards improving investment conditions, but says broader reform is needed to support positive development outcomes across Victoria.
Property Council Victorian Executive Director Cath Evans said the changes were welcome, but more substantial action was needed to restore investor confidence and attract capital to Victoria. She said reform must also address the challenges facing the commercial property sector, not just housing.
“The Government has belatedly recognised the impact Victoria’s property tax settings are having on investment and housing delivery, and these changes are a step in the right direction,” she said.
“Anything that helps open the door to more capital coming into Victoria is important. We need that investment to build the homes, workplaces and infrastructure our state urgently needs.
“However, this isn’t just about housing. Restoring Victoria’s economic competitiveness requires a broader focus on the commercial sector, which was notably absent from today’s announcement.
The Property Council has welcomed the commitment to a post-election review of property charges and is calling on all parties to commit to meaningful tax reform ahead of the state election.
“The industry has long been calling for urgent tax reform, and it is encouraging to see a commitment to examining the impact of Victoria’s property charges.
“We know the 2023 doubling of the Absentee Owner Surcharge has had a significant impact on investment in Victoria, with an estimated $5 billion in lost economic activity.
“Victoria cannot afford to keep losing investment to other states. We need to see more substantial commitments from all parties to address our uncompetitive property tax settings, restore investor confidence and make it easier to deliver the homes, workplaces and infrastructure our growing state needs.”
Property Council Group Executive Policy and Advocacy Matthew Kandelaars said the changes must be viewed in the context of the broader tax settings affecting investment across Victoria.
“Victoria is competing with every other state for the capital needed to deliver housing, commercial property and critical infrastructure. Our tax settings play a significant role in where that investment goes,” he said.
“While targeted exemptions can help address specific barriers, they do not resolve the broader competitiveness issues created by Victoria’s property tax regime.
“The post-election review must look beyond individual charges and examine the cumulative impact of property taxes on investment, development feasibility and economic activity.”
