Labor’s social housing levy faces upper house hurdle

The Andrews government’s proposed social housing tax on property developers could face a rocky passage through State Parliament, with the opposition vowing to vote against the $800 million annual contribution in the upper house.

Under the overhaul, 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 property developer contribution would fund an extra 1700 social and affordable homes each year.Credit:Bloomberg

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

Labor now controls just 16 out of 40 upper house votes, placing its legislative agenda under a cloud in the lead-up to the November 26 state election.

With Labor requiring an extra five upper house votes, Opposition Leader Matthew Guy said he was hopeful the levy could be blocked. He said if it did pass, a future Liberal government would repeal the change.

“We will fight this crushing new tax tooth and nail, on behalf of all Victorians seeking to enter the housing market or buy a new home,” Mr Guy said.

The overhaul appears to be supported by the Greens, the Reason Party and the Animal Justice Party, with some qualifications. Transport Matters MP Rod Barton said as an advocate for social housing, he “absolutely” supported the legislation.

Victorian Greens leader Samantha Ratnam welcomed the levy, although she said it wouldn’t pay for nearly enough housing.

“We’re concerned that without a commitment to more funding, this levy won’t go anywhere near building the number of public housing homes we need to address our blown-out waiting list or rising rates of homelessness,” she said.

A spokesman for Reason Party leader Fiona Patten said anything that increased resources for community housing was welcome, given Labor’s lacklustre record.

“Evidence shows increasing investment in community is not only key to alleviating homelessness, but it saves scarce public resources. It should therefore appeal to progressives and fiscal conservatives alike,” the spokesman said.

But support from other independents needed to pass the legislation is unclear.

A spokeswoman for the Justice Party’s two upper house MPs was unable to confirm a position as the legislation has not yet been released.

She said the party had long backed schemes to support social housing, although there was concern about the impact of the levy on affordable housing.

Liberal Democrats MP David Limbrick was opposed to the legislation, saying it would add to the cost of housing.

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