Greens plot to block Labor’s vacant land and short-stay taxes

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The Greens are threatening to block Victoria’s contentious taxes on vacant residential land and short stay properties unless they get significant changes to the state government’s signature housing policy.

In a letter to Treasurer Tim Pallas, Victorian Greens leader Samantha Ratnam said they would not support the government’s new measures to rake in millions of dollars more from taxpayers through property charges.

Victorian Greens leader Samantha Ratnam.Credit: Joe Armao

The move means the government’s key housing policies do not yet have the support to clear Victoria’s upper house. Without the support of the Greens, Labor does not have the 21 votes needed to get the laws over the line in the upper house.

The opposition is against the new taxes and the Libertarian Party has vowed since 2018 to oppose any expansion of the state’s tax system. The Shooters, Fishers and Farmers Party is also unlikely to support the bill.

Changes to Victoria’s residential vacancy tax are the first piece of legislation to come to parliament under the Allan government’s vision to tackle the housing crisis and build 80,000 new homes every year.

Under the package, the state announced it would charge 7.5 per cent on the income from short stay properties leased out through platforms such as Airbnb or Stayz.

Pallas shocked the property industry two weeks later by announcing the state tax on Melbourne homes sitting vacant for more than six months a year would be expanded across Victoria. He also announced empty lots in established Melbourne suburbs would pay higher land tax bills.

Ratnam told The Age that the Greens would not support the laws needed to pass these changes – or any part of the housing plan – without discussing a range of other measures.

The Greens said they wanted to discuss rent controls, tighter regulation of the short stay industry including 90-day caps, and zoning to require developments have at least 30 per cent public and affordable housing.

They have also asked to stop the demolition of public housing, to build 100,000 new public homes and a tougher vacant land tax that charges 3 per cent of a property’s capital improve value, rather than the current rate of 1 per cent.

Lock boxes for short-term rentals on Spencer Street in Melbourne.Credit: Pat Scala

“We believe a number of measures that the government has announced as part of their statement just won’t work and will actually make the housing crisis worse,” Ratnam said.

“If Labor wants to pass their housing bills, they need to sit down with the Greens and support our solutions to actually fix the housing crisis”

When asked if the Greens would negotiate on its wishlist, Ratnam said they wanted all the reforms but were willing to negotiate in good faith. She said they were also prepared to vote against the levy on short stays when it was introduced within the next three months.

“We understand the government will bring a number of bills related to the housing statement, this being the first one of them,” she said. “We want to make sure that anything that comes before the parliament will actually have a meaningful impact on solving the state’s housing crisis.”

The state government was contacted for comment. Defending the expanded vacant land taxes this month, Pallas said the reforms wouldn’t “massively advantage the budget”.

The reforms to unimproved land charges would bring an extra $31 million while the expansion of the residential land tax is expected to collect another $6 million. “We can’t afford, really, to have vacant land in metropolitan Melbourne sitting idle,” Pallas said at the time.

“Our clear message to the landowners is to either develop land or sell it to someone who will,” Pallas told the industry breakfast.

Greens treasury spokesman Sam Hibbins said there were tens of thousands of vacant homes but the Allan government’s tax would only cover a handful of them.

“Taking bolder action will make thousands more homes available to renters or people wanting to buy their first home,” he said.

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