Changes to GAIC

By Bridget Brady
PLANS to levy buyers rather than sellers as part of changes to a controversial land tax still hurts property owners, according to a lobby group.
Taxed Out chairman Michael Hocking said landowners would not get the true value of their properties when they sold because buyers would deduct the Growth Areas Infrastructure Charge (GAIC) from the sale price.
Under the GAIC scheme, those buying properties included in the Urban Growth Boundary in or after 2009 will be subject to a $95,000 per hectare levy, a payment that can be deferred but will incur interest. Parts of Casey, including Clyde and Devon Meadows, are being investigated as part of State Government plans to extend the UGB to accommodate Melbourne’s growing population.
Planning Minster Justin Madden this week told the News he thought the State Government had “got the balance right”.
But the tax left landowners who wanted or found they had to sell in the next few years stuck, because development was not likely for years, Mr Hocking said.
“The incentive to purchase a property that is 10 or 15 years from development is just not there,” he said.
“Certainly no family wishing to live on a few hectares will take on this added liability when they can purchase property outside the UGB without this headache. This leaves only the developers in the market.”
But Madden said people should feel “very optimistic” if they owned properties in the UGB. He said the value of their properties would increase “significantly”, but he did not put a figure on how much.
He also said development would occur sooner rather than later.
Members of Taxed Out said there was no proof the value of their properties would increase as much and as quickly as the government says.
Landowners have also expressed concerns their council rates would skyrocket when their properties were brought into the UGB.
Mr Madden said the State Government would work with local councils to sound out their position on this issue.
Landowners and members of the Taxed Out group have slammed the State Government for its GAIC scheme, which previously planned to charge the seller.
But Mr Madden said it was not necessarily Taxed Out that brought about the changes, despite the group’s continued pressure.
“We don’t change our minds lightly on these matters,” Mr Madden said.
He said he wasn’t the least bit surprised with the backlash the GAIC caused.
“People have a very close sense of personal attachment to their land.”
The GAIC will be used to provide infrastructure for new communities.
The GAIC legislation is expected to be presented to State Parliament for consideration later this year.