Property Council Victorian Executive Director Cath Evans said that this proposal is proof of the government effectively killing its most ambitious housing project in one fell swoop.
"Time and time again, the Victorian Government shows it does not understand that it cannot tax its way to housing supply and affordability," she said.
"It cannot credibly claim the Suburban Rail Loop precincts will deliver Australia's biggest housing project while simultaneously imposing the highest development taxes in the country. Those two positions are fundamentally at odds.
"Industry feedback is clear – these figures simply do not stack up. If projects proceed at all, it will only be by passing these costs directly onto home buyers – pushing prices higher and directly undermining the government's own housing affordability objectives.
"At a time when home ownership has never felt further out of reach for many Victorians, this proposal sends a clear message that the government is not listening to the community or to the industry it relies on to deliver homes."
Recent data shows that the Victorian property sector is falling far behind the rest of the nation due to the excessive charges and taxes the industry faces. Foreign investment into new homes and workplaces has dropped by 50 per cent in the past three years, and the Property Council's latest industry sentiment survey showed Victoria again had the lowest confidence in its state government out of all the states.
"Large-scale, high-density precincts of this size and complexity require significant domestic and international capital. Victoria is already struggling to compete for that investment. This proposal makes it even harder," Ms Evans said.
"At a time when investor confidence in Victoria is already at historic lows, the government is sending a clear message: take your investment elsewhere."
Ms Evans said the government must urgently provide greater transparency around its assumptions.
"If the Government believes development can absorb this level of taxation and still deliver affordable, large-scale housing, then it must explain how. At present, industry is being asked to make investment decisions in the dark.
"The SRL precincts should be Victoria's opportunity to attract global capital, unlock housing supply and lift productivity. Instead, the government risks turning them into a warning sign for investors considering Victoria."
