An unexpected and unannounced change to developer stamp duty that was introduced last month, immediately after the state budget, was a necessary measure despite the lack of notice.
The impact has been felt immediately, with developers questioning the viability of some projects. One developer, Resi Ventures, have walked away from a 900-lot house-and-land in West Melbourne.
Under the new rules, developers are treated as acquiring “beneficial ownership” of any site worth more than $1 million and subjects them to 5.5 per cent stamp duty on potentially the entire value of any land. Developers similar to Resi Ventures must limit their projects to sites that can be developed immediately.
On the new rule changes, Premier Daniel Andrews was unapologetic when he stated “We have to make difficult decisions from time to time. It’s not always possible to bring into your confidence everybody that you might like to and there are a range of different reasons for that.”
It is the lack of warning that has caught developers off-guard, however, consulting with the industry could have raised probity issues.
Changes are afoot in the construction industry, where combustible cladding is making headlines prompting the state government to act and bring certainty to a housing market facing “stranded assets” – apartments deemed unsaleable due to the cladding liabilities.
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On Tuesday, Mr Andrews told ABC Radio there will be an announcement soon of a “dedicated authority to deal with the issue.”
This new building regulator would be given the powers to take action against the owners of building companies that went into administration after being liable.
“There are some interesting times ahead for some building professionals, too, who have not done the right thing.”
There was no announcement about where the funding would come from to support the underwriting of privately-owned building impacted by combustible cladding, and more information is expected soon.
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