Incentivising property investment in 2024-25 Victorian State Budget the key to boosting housing supply

The Real Estate Institute of Victoria (REIV), has made a submission to the 2024-25 Victorian State Budget on behalf of its members, calling the Victorian Government to initiate a comprehensive review of its property tax priorities with the objective of attracting and retaining investment in the state’s property sector.

The REIV’s 2024-25 Victorian State Budget submission urges the Victorian Government to focus on increasing overall housing supply by reconfiguring the state’s property tax regime to incentivise investors. It has outlined three key recommendations to achieve this.

Its first recommendation is for the Victorian Government to consider the introduction of new tax incentives for investors supplying long-term rental stock to the market. As a practical example, this may be implemented as a land tax concession for property owners who keep their property on the rental market for an agreed consecutive term, such as five to ten years. These long-term rental supply incentives are likely to have greater impact than recently announced levies on vacant land and short stay accommodation.

Secondly, the REIV recommends a complete review of the state’s stamp duty regulations, including considering a complete replacement of stamp duty tax with a new structure that promotes mobility and supports economic activity.

The REIV is finally calling for the retention of negative gearing in its current configuration. The REIV’s view is that negative gearing plays an important role in incentivising investment in the state’s rental market, and its removal would lead to further destabilisation of the rental market and removal of stock.

Jacob Caine REIV President, says the Victorian Government must reconfigure its property tax policy using principles that make Victoria an attractive state for investors.

“It’s time the Victorian Government reconsidered several comfortable yet outdated taxes like stamp duty and instead adopted fit-for-purpose tax measures that will drive investment and give more Victorians a roof over their heads,” Mr Caine said.

“To increase the supply of housing in Victoria, we need a tax regime that positions this state as a more competitive place to invest. While we welcome recent commercial and industrial property policy efforts, more must be done in residential property to bolster housing supply.”

Read the full 2024-25 Victorian State Budget submission.

Media Contact:
REIV: [email protected] 03 9205 6607 www.reiv.com.au