Melbourne’s construction and property industry have had mixed news from the state’s treasurer. Picture: David Caird
Victorian Treasurer Tim Pallas has announced a full waiver to the vacant residential land tax for 2020.
He has also raised hopes a property and construction industry stimulus package could be announced before the state budget and private real estate inspections could recommence sooner than currently outlined in the state government’s road map to recovery.
However, he said the government might have less need for office space in Melbourne’s CBD after COVID-19, in what is more concerning news for the city’s post-virus recovery.
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Speaking at an online Property Council of Australia event today, Mr Pallas noted many properties “would never have been empty if not for coronavirus” as he waived the tax, which covers 1 per cent of the capital improved value of inner and middle-ring Melbourne homes left vacant for six months.
The government is also waiving 25 per cent of this year’s congestion levy.
Treasurer Tim Pallas has announced a property tax concession. Picture: NCA NewsWire/David Crosling
Asked when property industry stimulus he flagged in June would be announced, the Treasurer said the government remained “very much focused on the vitality and health of the construction industry” and expected to release word at or before the state budget.
“We will be having something more to say about what we can do to support the industry, but now is not the appropriate time,” Mr Pallas said.
The budget is expected to be released in late October or November.
Mr Pallas also said the state’s road map was not “set in granite” and there may be scope for real estate inspections and display suites to recommence sooner than initially outlined.
“I was watching the chief health officer the other day and he made the point that what we will seek to do is populate our projections with hard data,” Mr Pallas said.
“As we get a greater degree of certainty we can start to assess if the road map settings are as we would like them … there will be a capacity to adjust at the margins.”
This would depend on proof that Melbourne was moving towards its COVID-19 case number targets, as well as the advice of the public health office, he said.
But in a move that has concerned property industry members, Mr Pallas noted working from home arrangements would be a factor when deciding plans for CBD office leases due to expire in 2023.
“We will see for some time a lesser requirement for office spaces right across the CBD, and I think you will find that in the commercial and in the government sector,” Mr Pallas said.
Property Council of Australia Victorian executive director Cressida Wall welcomed the government’s tax relief announcements, but said “there is still more to do” and urged the state to maintain its full presence in the CBD.
“If anything, the government should consider its lease holdings as an economic stimulus lever,” Ms Wall said.
“Now is not the time for government reduction in lease holdings in the CBD.”
Property Council Victorian executive director Cressida Wall has welcomed the tax relief. Picture: David Crosling
Property investment firm Charter Hall’s Simon Stockfeld said while many commercial office leases were being evaluated at present, the government’s addition to the list made sense but was for now a matter of “watching this space”.
“We would be surprised if the requirement for government as an occupant in the CBD changed materially,” Mr Stockfeld said.
A stimulus plan proposed by the Property Council including tax breaks and grants could generate an estimated $24.4b in economic activity.
“We will continue to work with the government to bring forward additional economic stimulus measures as soon as possible,” Ms Wall said.
“The state government has listened to our industry’s feedback along the way. We are working closely with the government and are hopeful property inspections can safely return ahead of the timeline currently proposed.”
A property industry survey by the Property Council found 30 per cent of respondents see a need for industry stimulus packages to include stamp duty concessions for investors buying off the plan. Just under a quarter called for downsizer and first-home buyer grants, one in five are hoping to see a build-to-rent package announced and a similar number are seeking relief for commercial landlords.
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