The Victorian government has launched the draft Growth Areas Infrastructure Contribution (GAIC) legislation aimed at addressing funding shortfalls for new urban areas.
?Under the new legislation, those who buy and develop land brought in the Urban Growth Boundary (UGB) and zoned for urban development will attract the tax contribution, of up to $95,000 a hectare, to raise $2 billion over the next 20 years. ?
The announcement comes after strong opposition from farmers and community groups on the fringe of Melbourne that had previously been slugged with the tax. ?minister for Planning, Justin Madden, said the new legislation shifted the burden from the sellers to the purchasers. ?
“We are determined to manage growth by planning new neighbourhoods with the services families need, rather than just sub-divisions,” he said. ?
“We want to ensure that when the houses are being built, there is appropriate planning and resources to deliver the public transport, parks, schools, roads, hospitals and other vital infrastructure that new communities need to help preserve our renowned quality of life.”?
Senior lecturer in urban planning at the University of Melbourne, Dr Alan March, commends the decision to tax new land owners and developers but said the legislation did not go far enough to encourage higher density housing. ?
“This act/ legislation is a step in the right direction, as it is suggesting that it is inefficient to build on the edge and developers will now have to provide extra money to set up infrastructure in those areas, but really we could go a step further." ?
The decision to tax new land holders could also be seen as encouraging this style of low density housing, said Dr March, despite concerns there is a land shortage in metropolitan areas. ?
“We are providing more and more development on the edge, without acknowledging all the extra costs, and in many ways we are subsidising people using land inefficiently if we do not tax them," he added. ?
Dr March was also concerned that the new tax would lead to lower quality housing as developers seek to reap back the costs of the land. ?
The GAIC changes will provide funding for public infrastructure such as roads, schools, parks and public transport. Under the proposal the tax will only be payable once on any parcel of land and parcels of land less than 0.41 hectares (equivalent to the old one acre lot) will be excluded from the tax. The tax will also be void if the and is sold for lots between 0.41 hectares and 2 hectares (5 acres) and has a house on it, however, GAIC will apply wherever the land is subdivided or developed.
