The NSW Greens will call for a 75% tax on the profits that landowners make when their land is rezoned.
The party says those profits are currently untaxed and so landowners benefit from a “massive transfer of public wealth into private hands” when their land increases in value, due to rezoning decisions made by governments.
A Greens policy document seen by Crikey says the tax would be levied at 75% of the difference between the officially assessed land value before the rezoning compared to the land value afterwards.
Greens MP and planning spokesperson Cate Faehrmann said the current system left some suburbs with poor access to infrastructure while netting “eye-watering profits” for developers.
“Developers are making millions off the back of rezoning decisions made at the whim of the minister, yet they’re contributing almost nothing back to the communities,” she told Crikey.
“Our plan will ensure that the community are also beneficiaries from the huge profits made from rezoning.”
The charge would only apply when land is redeveloped, meaning homeowners whose land gets rezoned wouldn’t automatically have to pay anything even if their land value increases.
The fee “would discourage the parasitic large-scale land banking that drives up prices and rates for everyone”, the Greens claim, and the tax revenue would be used to pay for local public infrastructure.
The party has taken the same policy to elections in other states in recent years, including Queensland and South Australia.
Analysis from Sydney University, presented to the NSW Productivity Commission in 2020, said such a tax could bring in more than $8 billion per year.
The academic behind that analysis, postdoctoral research associate Cameron Murray, told Crikey no one has noticed that the state has been “giving away billions of dollars for free”.
He said the ACT has had a 75% “betterment levy” in place for decades, and that NSW used to have a 30% levy in place for a short period in the early 1970s.
He said that in his view, it would be better for the public to “sell” property rights than to “give them away”.
“It’s always a tough battle because obviously the landowners would rather have free money than not,” he said.
The office of NSW Planning Minister Anthony Roberts said the state government had considered replacing the existing system of special infrastructure contributions with a “simpler, broad-based charge” in the area around greater Sydney, but that the proposal “did not proceed following stakeholder feedback”.
Special infrastructure contributions are fees levied on developers working near major projects.
A spokesperson for the minister said the government would introduce an amended package to implement these changes this year, “taking into consideration the submissions received during the public consultation process”.
“This is expected to increase revenue by $924.2 million over three years to 2025-26, which will be used to support the delivery of infrastructure projects in the regions where the revenue is collected, unlocking new housing supply,” the spokesperson said.
Labor’s planning spokesman Paul Scully dismissed the Greens’ proposal altogether.
“NSW Labor has no plans to introduce new taxes at this election,” he said.
What an excellent idea – great disincentive for local and state government from flogging off every bit of public land they can find. For far too long the various NSW NSW Planning Ministers have effectively outsourced NSW planning to the big developers, resulting in the current protracted planning mess. The current planning minister Anthony Roberts is no different as he has says- he has had feedback from “stakeholders “ (not the you or I he was elected to serve). Please tell us Minister Roberts – what was the feedback, where did it come from, and why is it a secret? Remember Anthony Roberts overturned the previous Minister’s restrictions on building in flood prone areas. Disgraceful. Remember
I’m not convinced this would help with land banking. It might even make it worse as developers sit on their land banks waiting for a nicer Government to come along and change the rules again.
Personally, I’d go all-in stick and SFA carrot with developer land banking. It is a scourge and major contributor to the property bubble. If land is rezoned for development and purchased, then the purchaser has six months to begin works and maybe five years to finish them, before the land is forcibly returned to public ownership. Use it or lose it.
Developers and land bankers quite rightly have a reputation for being parasites.
Where I live, several thousand acres of farmland has been developed into houses. Within only 10 years there are now >35,000 people living in this space. There is only one access road which in former times was a connecting road between 2 country towns. It has had minimal upgrading. Parts of it have been turned into 4 lanes in the last year, but parts of it cannot widened be unless they resume some of the new houses. Inside the development the roads are too narrow and there is no chance that buses could ever provide public transport. There is no reserve for a future train or bus link. There is more land allocated for shopping centres & fast food joints than there is for schools and medical/ hospitals. The only schools are private schools (ie buyers of land from the developers) There is no chance ever for public transport to be effective. It would appear that land has been planned to maximise the number of blocks for houses with everything else being a distant sub tier priority. The Greens are right to pursue more fees from developers. It is an area of commerce that has become highly irresponsible if not outright corrupt. And it affects the quality of life of many many people.
Perrottet and his government represent everything I normally despise: the hard right and organised religion are a heady mix on the contempt-ometer.
But-I can’t believe I’m saying this-Minns and co are worse.
Pokie/developer friendly and gutless, they stand for nothing but the small ball neoliberalism that saw the federal ALP slither into power last year.
This won’t be so simple.
Perrottet ain’t Morrison.