Mornington Peninsular

People should know about the state government’s amendments to the Land Tax Act. An interesting article was written about it by Michael Flynn QC in The Age of February 17th 2020. regarding the amendment to the Land Tax Act to restrict land tax exemptions on contiguously rated properties only to regional Victoria. See: https://www.theage.com.au/national/victoria/home-owners-could-be-slugged-with-an-unfair-tax-20200213-p540jq.html. These changes have resulted in charging land tax for anyone in metropolitan Melbourne with vacant land contiguous with their place of residence. Until now, land adjacent to your home was exempt from Land Tax if the property was rated by Council as contiguous (i.e. house and land rated as one parcel of land) The new amendment has changed this to now levy the tax on any properties in metropolitan Melbourne which have contiguous vacant land next to a place of residence. (For the purposes of this exercise, Mornington Peninsula also is considered to be metropolitan by the way). A paltry $43 million revenue is anticipated.

We have just received a Land Tax bill for $7,786 for two vacant blocks adjoining our house on the Mornington Peninsula. We currently maintain the two vacant lots as 'Land for Wildlife’ – effectively as our bush garden. The garden provides the last remaining piece of intact habitat in the surrounding estate – and we say provides open space and improves the amenity of the area for all other resident too. Many other affected people might have veggie gardens, sheds, animal runs, chook pens etc.

We spoke to the State Revenue Office asking why the Act was amended, and were advised that there was a land shortage in Melbourne due to population pressures and that therefore the land should be developed. So, clearly this “initiative” is designed to get people with vacant land next to their existing homes to sell the vacant land- or maybe the home as well. The consequences of this are obvious: Developer windfall resulting in more people, more traffic, less trees, lost amenity and privacy etc. etc.

Many people affected by this change to the Land Tax Act might be asset rich but cash poor, living in properties they have owned for decades. The dramatic fall in interest rates is likely adversely affecting their ability to meet their existing costs of living, let alone a new land tax bill in the thousands of dollars. Presumably most affected people in the real metropolitan Melbourne, will have sites valued higher than ours on the Mornington Peninsula so will likely be getting bills for even more $$ than we have. They might have no alternative but to sell up.

I suspect many people would be horrified by this latest effort to destroy suburban amenity and impose social engineering on people who can no longer afford to live where they want to, just so we can jam in more people. It smacks of a desperate attempt by government to please developer mates by freeing up any remaining vacant sites in the suburbs for developers to move in- meanwhile existing residents are yet again the losers.

Surely this is an unfair and unjust tax. It was slipped in without any consultation with affected people or the wider community. It certainly was not flagged as a policy in the last state election, and the predicted $43 million revenue - for all the inconvenience it imposes on home owners and likely environmental and amenity impacts - is paltry in the extreme.