On Tuesday, Victorian Treasurer Tim Pallas announced that the state would expand its Vacant Residential Land Tax from the inner and middle suburbs of Melbourne to the outer suburbs and regions of Victoria effective from January 1, 2025.
Pallas said the tax would incentivise landowners to either develop vacant land or sell it.
“We can’t afford really to have vacant land in metropolitan Melbourne sitting idle for year on year”, he said.
“Our clear message to landowners is to either develop the land or sell it to someone who will”.
“Similarly we’re not putting in place a rule for landowners that we as a state are not going to apply to ourselves.
“We expect every government agency that is holding land to justify exactly why they’re holding that land and not putting it in the marketplace”.
Pallas said the current tax raised about $6 million a year, but was more about amending behaviour.
“It doesn’t massively advantage the budget”, he said.
“What it does is tries to send a message to people who have under-utilised assets to think about using them”.
On Tuesday night, I appeared on The Bolt Report where I explained why the Victorian Government’s expanded Vacant Land Tax is good policy, but also a token effort to boost housing supply when the real solution is to lower immigration.
It’s another case of “fiddling while the housing system burns”:
“The last thing you want during the housing crisis is for land to stay vacant. So, at least the margin, if you’re going to tax that vacant land it should bring it to market earlier. It might actually boost housing supply”.
“That said, it’s really fiddling while the housing system burns. It’s really small beer. The major problem we’ve got obviously is the immigration program”.
“We run an immigration program that’s way too high. It’s far higher than the ability for the nation to build homes. So, the solution really is to cut that”.
“What Jacinta Allan should be doing is getting straight on the blower to Anthony Albanese and saying: ‘look we can’t handle this immigration. You’ve got to cut it. And if you’re not going to cut it, you’ve got to give us $100,000 per migrant that lands in Victoria so that we can pay for infrastructure and all the other stuff that has to happen”.
“I guarantee you, Andrew, if she did that and so did [Premier] Chris Minns in New South Wales – the two leaders of the two biggest states coping the most migration – the federal government would be forced to cut immigration”.
“Because the end result is you do not solve a housing supply problem by running the biggest immigration program in history. And that’s exactly what the Albanese Government is doing. And it’s making the problem worse every single day”.
We also discussed foreign purchases of Australian homes, interest rates and why the RBA was right to hold rates at Tuesday’s Monetary Policy Meeting:
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