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‘Nasty’ Victorian housing tax slammed as Daniel Andrews backtracks on legislation

A controversial plan that would slug homeowners potentially tens of thousands of dollars then funnel the cash into social housing is in doubt.

Victorian Treasurer Tim Pallas has touted the social housing tax bill as a plan that would save lives and create jobs.

Under the plan, all newly built developments with three or more dwellings or lot subdivisions would hand over 1.75 per cent of the expected project value, with the cash used to fund an extra 1700 social and affordable homes each year.

The tax is expected to bring in about $800m a year, but the property and building industries have warned it could add almost $20,000 to the cost of a typical house.

Councils have been critical of the government’s proposed changes to social housing, which would also exempt such properties from paying rates.

Social housing rates were previously paid for by the state government, equating to about $54m.

The change may mean homeowners could be hit with higher rates bills, while parking fines and other council fees could also be increased.

Following widespread condemnation of the tax, Victorian Premier Daniel Andrews on Wednesday admitted the bill may not be introduced to parliament.

“I think it’s fair to say that the future of this bill is very, very uncertain,” he said.

Camera IconDaniel Andrews backtracked on the new legislation on Wednesday. NCA NewsWire / David Crosling Credit: News Corp Australia

Mr Andrews hit out at the Property Council, which has criticised the plan, with the Premier telling reporters the government had held “deep talks” on the issue before an agreement was reached.

But he said the tone had changed in recent days.

“We have had a long dialogues with property developers, where they expressed to us very clearly that time is money, meaning that more blocks get subdivided, more land is available for purchase, meaning more profit for those developers,” he said.

“Some would say massive windfall profits.

“I’m not in the business of creating super-profits for developers if they are unwilling to support sharing those profits with those who need more affordable housing.

“We had an agreement it seems that that agreement is not being honoured.”

Camera IconThe property industry predicted the plan could add around $20,000 more to the cost of a home. NCA NewsWire / Luis Enrique Ascui Credit: News Corp Australia

Following Mr Andrews’ comments, the state Opposition confirmed their planned 5pm briefing on the policy had been cancelled.

Opposition treasurer spokesman David Davis accused Mr Andrews of “frogmarching”.

“They seem to be retreating at a very fast rate. It’s clearly stalled in some way. Something is going on,” he said.

He earlier claimed the bill would hit everyday families and small business ratepayers.

“It’s another nasty special deal from Andrews that will raise the cost of living for everyday families,” Mr Davis said.

“Victorian families will have to pay more rates to pick up the rubbish and provide the services for the social housing sector.”

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