Legislation for Victoria's new ‘Windfall Gains Tax' (WGT) is due to be introduced to Parliament later this year. It is proposed to be a tax on the uplift in land value flowing from the rezoning of that land that will operate separately to and in parallel with the existing development and infrastructure contribution charges under the Victoria Planning Provisions and the Planning and Environment Act 1987 (Vic) (PE Act).
The WGT is promoted as a way for developers to “contribute their fair share” to infrastructure such as public transport, roads, hospitals and schools. However, it will be different to existing development and infrastructure contributions which, in the case of any monetary component, are largely levied at a specific rate per hectare, rather than by reference to the metric of property value uplift. The funds from the WGT will form part of the Victorian Government's consolidated revenue and, as far as we know, may be spent as the State sees fit.
