Victoria to cut property taxes for foreign developers to boost housing

The Victorian Labor government has announced plans to reduce costs for foreign developers to stimulate housing supply. This move includes cutting the absentee owner surcharge—an additional land tax on overseas developers—for residential projects that meet specific government priorities.

Under the new policy, overseas developers will be exempt from the surcharge during construction if their projects qualify for the Development Facilitation Program. This fast-track approval system targets significant residential projects, strategic land unlocks, or energy-efficient medium-density housing. Additionally, foreign investors will receive a two-year tax exemption following the completion of residential developments.

If re-elected in November, the government has promised an independent review of both the absentee owner surcharge and the foreign purchaser additional duty. The review aims to assess tax collection efficiency, the impact on foreign investment, and the consequences for first-time homebuyers. These measures come as the state struggles to meet its target of building 800,000 homes over a decade, currently trailing by 55,000 units.