Qld, Victorian governments move to ease housing undersupply

The Queensland state government has announced that it will open up its $350 million Incentivising Infill Development Fund to applications on 10 June.

The $350 million Incentivising Infill Development Fund (IIDF) aims to fast-track the assessment of development applications for infill housing developments that could deliver affordable and diverse housing.

The fund will support the viability of residential development that can increase housing density by covering known infrastructure costs to prevent these expenses from being passed on to home buyers, promoting housing choice and improving affordability.

Funding will be available for:

• The payment of infrastructure charges for trunk infrastructure costs levied by relevant entities for eligible residential development.
• Providing refunds of development application fees for applications lodged since the announcement of the fund (on 3 February 2024) and which are recipients of the above infrastructure charging relief.

Priority will be given to projects that are development-ready (and will translate to homes on the ground within the specified period) and/or those that deliver affordable housing and/or include or support gentle-density housing.

The fund forms a key initiative of the Homes for Queenslanders plan and aims to help the state reach its goal of bringing online 1 million new homes by 2046.

Queensland Premier Steven Miles said: “My government’s Homes for Queenslanders plan is about delivering more homes, faster.

“Our nation-leading infill development fund will make building homes where we need them even easier. It’s designed to encourage bigger builds in urban areas, close to public transport, shops and schools.

“This fund will play a critical role in ensuring we have the homes needed to meet our growing population, and I know it will make a difference.”

Queensland Housing Minister Meaghan Scanlon added that the government was “slashing red tape” and providing incentives to support industry to build more homes, faster.

“This is about density done right and making sure we maximise opportunities on underutilised land with access to existing transport, infrastructure and jobs,” she said.

Victoria extends vacant residential land tax

Meanwhile, down in Victoria, the state government is expanding its vacant residential land tax (VRLT) as part of a move to increase housing utilisation.

Nearly all homes that are left vacant in Victoria for more than six months in the calendar year will be liable to VRLT as of 1 January 2025, the Allan Labor government has confirmed.

Currently, the tax only applies to Melbourne’s inner and middle suburbs. However, VRLT will apply to homes across Victoria if they are left vacant for more than half of the year in the preceding calendar year.

From 1 January 2026, the VRLT will also apply to empty residential blocks in the inner and middle parts of Melbourne, in a move to discourage land banking and incentivise owners to build more homes.

Holiday homes, properties held in trust or owned by companies, and properties that are typically exempt from land tax (such as those used for primary production or owned by a charity) are exempt from VLRT.

Under the VLRT, an escalating rate of tax will apply, based on the number of consecutive years the land has been liable for VRLT.

Existing dwellings that are vacant for one year will still pay 1 per cent of the capital improved value, but those vacant for two consecutive years will pay 2 per cent and those vacant for three or more consecutive years will pay 3 per cent.

Speaking of the expansion of VRLT, Victorian Treasurer Tim Pallas said: “We know we need more homes for Victorians, and by cracking down on vacant properties we are easing the housing pressures being felt across the state.

“Expanding vacant residential land tax will free up empty houses for rent and sale, boosting supply and making homes more affordable.”

The move comes as the state undertakes a compliance investigation into VRLT, having recently found that 177 properties in five buildings were liable for VRLT, resulting in 337 VRLT assessments covering the 2019–24 land tax years.

Another 13 apartment towers, as well as houses in the inner and middle suburbs of Melbourne, will now be targeted in the compliance investigation.

These investigations aim to make better use of empty homes by encouraging owners to put them on the rental market to avoid paying VRLT, according to the Victorian government.

It is also running a tip-off scheme to enable Victorians to report vacant properties that could be used as a home or developed.

[Related: High-density approvals reach 12-year low]