Thursday, 19 June 2025

Bills

State Taxation Acts Amendment Bill 2025

Second reading

Debate resumed on motion of Gayle Tierney:

That the bill be now read a second time.

Jaclyn SYMES (Northern Victoria – Treasurer, Minister for Industrial Relations, Minister for Regional Development) (10:26): Thank you for those earlier contributions on this bill on Tuesday and for the opportunity to sum up before the committee stage. This bill delivers several key items from the 2025–26 budget and amends several state taxation laws to support fair and effective revenue management for everyone in Victoria. Importantly, this bill delivers no new taxes. Despite what some have said, this is at least a revenue-neutral or even revenue-negative tax bill.

The bill seeks to extend the eligibility period for the temporary off-the-plan stamp duty concession for purchases of apartments and townhouses for a further 12 months; that will bring it to 21 October 2026. That was announced in the budget and has been well received, because it is an initiative that is proving quite popular and getting more people into more homes.

Importantly the bill introduces a provision to enable victim-survivors of family violence to access tax relief. Currently victim-survivors of family violence are unable to access a land-tax exemption when they leave their principal place of residence due to family violence and are unable to access first home buyer benefits to assist them to purchase a new home if they have previously had an interest in a property. The bill provides these concessions for the first time in legislation to victim-survivors, who we know can sometimes experience an inherent disadvantage when trying to re-establish their lives after that experience. It is my intention and hope that these measures will offer some level of assistance and relief during the monumental task and the bravery of fleeing a home and finding a new one.

The government is committed to ensuring that renters can access long-term housing, and the bill makes some changes to the build-to-rent (BTR) development provisions. The government wants these developments to offer long-term alternative housing options to home ownership for Victorians. To reflect this commitment the bill clarifies the intention that a genuine lease term offer of three years must be offered to a renter and requires the build-to-rent provider and renter to jointly sign a declaration if the renter elects to take out a lease term shorter than three years. The bill also gives the commissioner of state revenue the power to not impose a higher tax rate during a period of build-to-rent development that is temporarily vacant or uninhabitable, such as during a renovation.

There are also some other changes in the bill that expand the vacant land conservation covenants account criteria, amend the commercial and industrial property tax settings, amend the definition of ‘regional employees’ under the Payroll Tax Act 2007 and amend the Taxation Administration Act 1997 to introduce a 50 per cent penalty tax for recklessness by a taxpayer. I certainly acknowledge the State Revenue Office (SRO) in relation to many of these amendments, because they are brought about by their experience and requests of government.

There has been a lot of engagement on this bill, and I thank members from a range of parties for their engagement. There will be a number of amendments which have been canvassed by previous speakers, but I will just address the house amendment from the government in the first instance and, in doing so, ask that that be circulated.

Amendment circulated pursuant to standing orders.

Jaclyn SYMES: This amendment will remove the current proposal in the bill to insert a minimum lease length of 12 months for BTR properties. Instead the amendment allows – importantly, I just do want to put this on record – but it does not require the Treasurer to set a minimum lease length in regulations of up to 12 months. I have made the decision to not set a minimum lease length at present but acknowledge that there are some views in relation to the appropriate settings in this regard. I have given a commitment to the property industry in particular for further consultation to ensure we are achieving the policy goals of the BTR tax concessions. This is a tax policy that has only been in place for two years, so I do want to ensure that, if we make any changes, there are no unintended consequences. Again, it is the original policy intention to enable more opportunity for long-term leases, and I do not want anything to undermine that objective.

The opposition have two amendments, the first of which they have had significant engagement with government on, and I thank them for that. We agree with the policy merit of allowing people more time to rebuild their damaged or destroyed home following a natural disaster without incurring land tax. This is something that is generally dealt with through exemptions and is custom and practice, but putting it into legislation to reflect what ordinarily happens is a good idea. This amendment will extend the maximum period a person can claim an exemption from land tax when their home is uninhabitable due to natural disaster, from two years with no evidence required to four years with the same settings. The commissioner of state revenue can grant an additional two-year exemption if they are satisfied there is evidence that the property is still uninhabitable. I do thank the opposition for their collaboration on this amendment. It has got to a point where everyone is happy to agree to that, it is my understanding.

The second opposition amendment has the effect of knocking back the 50 per cent recklessness penalty tax provision. This is again informed by advice from the SRO. Importantly, a penalty tax is an enforcement measure that deters noncompliance. If people comply with their tax obligation, penalty tax obviously does not apply. The change encourages people to comply in the same way that other legislation includes penalties for noncompliance. As I said, this is informed by the SRO’s experience. Those that are attempting to paint it as a new tax measure would be incorrect to do so. And in doing so, this brings about more effective legislation based on those that are dealing with these matters each and every day. So I do not support the opposition’s attempt to disagree with the SRO in this matter.

The Greens have got some amendments, and I know we can deal with this a little bit in committee, but just in summary, the first one is in relation to stamp duty concession caps of $1.6 million. On first glance of the policy, I shared the concerns that the Greens have. I do appreciate that there is policy merit behind not offering tax concessions to high-end, premium apartments. However, the feedback I have received from industry – and again, this is a very new scheme – is that developers can rely on the higher value dwellings being sold first to enable them to secure finance to ensure that further dwellings, or the more affordable apartments in a complex, can then come online and be made available. The advice is that without that, you might have the high-end purchasers buying ready-made or previously built, and therefore you would not get the benefit of more homes being built by virtue of that. But it is something I am very happy to keep an eye on and continue to get feedback on. I just think it is a bit premature, given I am told that it might stymie development, and the whole point of this policy is to build more homes. I am more than happy to have that conversation in committee, but that is pretty much the reason I am not in a position to accept that amendment today.

The second amendment restricts the rental increases that can be imposed during a fixed-term lease. The advice I have is that there could be unintended consequences with this amendment, as it could encourage developers to push renters into shorter term leases to enable rent increases between tenancies. The government is therefore not supporting the amendment on this basis.

In conclusion, I do thank many members for the engagement. I acknowledge the conversations and consultation that have also occurred with the property industry, particularly on the build-to-rent stamp duty aspects of the bill. I do believe that this is a balanced bill that delivers tax concessions for those that will benefit either from an extension of the existing policy or the introduction of a new setting, and it also fixes up and catches some of those fringe cases that fall outside existing legislation, as informed by the SRO. I commend the bill to the house.

Motion agreed to.

Read second time.

Committed.

Committee

Clause 1 (10:36)

Sarah MANSFIELD: Thank you, Treasurer, for your explanation earlier, but I would just like to understand a bit more regarding the extension of the stamp duty concession for buying off the plan. Because it is progressively applied, those buying homes for over $2 million will effectively receive a higher rate of tax concession than those buying more affordable homes. What is the policy justification for giving a proportionately higher tax break to those most wealthy people over people who are struggling to buy an affordable home? You mentioned that it is needed to stimulate demand – that the building industry feels it is necessary – but our understanding is that a lot of these higher end properties would sell anyway, regardless of the tax concession. I guess I am wanting to understand how that can be justified on a policy basis and what evidence you are relying on to continue that.

Jaclyn SYMES: It is fair to say there is not a lot of evidence either way. Although the policy is almost 12 months old, because you do not receive the benefit until completion, the data is not necessarily there, so I can really only go on what people are telling me. I share your concerns. This is about ensuring more homes and making it more affordable for people to enter them. That is the policy objective. But we have not at this point in time delivered any caps because we want it to be available for all. The main reason that I am not yet convinced to bring in a cap is the advice that, particularly in apartment complexes, the penthouses, for example, off the plan can be sold, and that generates the ability for further investment and the ability to get finance to complete the project. So the advice is that if you remove that stamp duty concession it may have a negative impact on new development. Yes, it is effectively a windfall for people who can afford homes, and I accept that there are some challenges on a policy basis to feel comfortable about that, but when I am advised that it will then generate more affordable apartments being built as a consequence, that is what we are weighing up at the moment.

Not only will the extension for another 12 months be a good policy outcome for people entering the market, it will give us more data to inform us where it lands. I take your point, your view, and some would say that these purchases would be made in any event. I am advised that perhaps that is not the case. I do not know. We need to just keep an eye on this. But am I uncomfortable with generous tax concessions for people that can afford it? Yes. The benefit that more people can get into homes – that is where I am keeping a close eye on it. I will continue to consult with industry and continue to consult with people that are buying. We will get some advice off the experience of people buying off the plan.

Sarah MANSFIELD: I thank the Treasurer for that response and appreciate that you have shared that you have some concerns about this policy but are willing to see how it goes for another 12 months. I guess we are in a situation in this state where we have a significant amount of debt, and we have this approach where we are providing tax concessions to people who quite likely do not necessarily need them as an incentive to buy a home, although you admit there may be some – that needs to be tested a bit longer. I would have thought that, given the financial situation we are in and the need to ensure that we are spending our money as prudently as possible, you would want a bit more certainty before having a policy that allows these tax concessions to go to people who potentially do not need them.

Jaclyn SYMES: I will go into a little bit more detail on the industry advice that I have. I understand the points you are making, but I would offset that with the policy priorities – the priority in general of government is to build more homes. We know that, if not the number one issue that people are talking about at the moment – there is cost of living as well – housing is what people in Victoria are asking the government to focus on, and this is just one of our levers in relation to bringing more homes online. Most developments rely on bank finance to proceed, which is generally only available if 50 to 80 per cent of the total value of the development is sold off the plan. That means selling some higher value dwellings early increases the chances that the overall development will proceed, including those lower cost dwellings.

Again, I repeat that imposing a cap could stop the duty concession from acting as an incentive for those anchor purchasers to buy off the plan, which reduces the chances of the development proceeding. Industry also advises that higher value dwellings are sold at a higher per-square-metre price, which helps cross-subsidise the rest of the development. We are going to keep an eye on it, but if it is producing more homes and producing more affordable homes, I am willing to give it another 12 months.

Sarah MANSFIELD: I think we will probably just have to disagree on whether we feel this is an appropriate policy setting. I guess just further to your point about keeping an eye on it, how do you intend to do that?

Jaclyn SYMES: I am just going to continue to consult with industry. When the advice is that developments cannot proceed unless they have those early purchases, that is some of the information I want to test.

David DAVIS: I do not want to labour this point. The changes with respect to trusts in this bill, what impact will they have on somebody whose principal private residence may be in the form of a trust, may be held by a trust – a beneficial trust, a discretionary trust of some type, that holds for somebody their principal private place of residence?

Jaclyn SYMES: In the briefing that I had, which followed the opposition briefing, I was informed that there were members of the opposition that were questioning the changes here. I can only reiterate the advice that there is no impact, they just affect the trustee and when they need to notify the State Revenue Office (SRO). I think there was a quite a bit of conversation with my office and the department about concerns about changes that are not happening.

David DAVIS: So there is no change in the status. Just then on the current status, land tax is leviable on a trust which is held for somebody, by its nature, and it is their principal place of residence. Is that correct, currently?

Jaclyn SYMES: They are really just about notification, the changes, Mr Davis. The issue that we are trying to fix, or the issue that we believe the amendment fixes, is that where land is held by a landowner in their own right, general land tax rates apply; where land is held in trust, a higher trust surcharge may apply. For the commissioner to apply the correct land tax, trustees are required to notify the commissioner when they acquire or dispose of trust land. The current notification requirements, however, are unclear in capturing certain trust-related scenarios where the legal ownership of the trust land does not change. So if you are part of the trustee and have a land ownership and then it transfers to you as an owner, it actually has not changed your relationship with the land; it is just the notification of the arrangements that need to be made. My advice from the SRO is that they are technical amendments to enable the commissioner to assess the land at the correct rate.

David DAVIS: So if the land is owned in a trust now and it was transferred to the individual ownership, personal ownership, that would be required under the new rules to be notified, but land tax would be payable currently under the arrangement where it is held by a trust and perhaps at a higher rate. But if it is transferred to an individual person, then land tax, presuming that is still their principal private residence, would not be payable. Am I reading that correctly, with the notification requirement?

Jaclyn SYMES: Mr Davis, the application of these changes is only anticipated to apply to situations where you are the trustee transferring it to yourself. Principal place of residence exemptions are unchanged, and you can apply for principal place of residence exemption if you are the owner if it is your principal place of residence. I have got a couple of scenarios that I might give you and they might make it clearer. There are two parts to the amendment. The first part clarifies the requirement for trustees to notify the commissioner where a trustee holds the land for one trust and the land is transferred to a different trust to be held by the same person as trustee, as I explained. The current notification requirements do not clearly capture this type of scenario, hence the commissioner is not always notified of these events. For example, Ms Green holds property as trustee of ABC unit trust and transfers the property to herself as trustee for DEF unit trust. Ms Green must notify the commissioner within one month.

The second part reduces the scope of the current requirement for trustees to notify the commissioner when they dispose of trust land. As separate requirements apply – that an acquiring trustee or third party must notify the commissioner of a change in legal ownership of the land – it is unnecessary to impose a requirement that disposing trustees must notify the commissioner of the disposal of trust land to an acquiring trustee or third party. The amendment makes it clear that rather than trustees notifying the commissioner when they dispose of the trust land, the commissioner must be notified if the trustee of the land disposes of the land directly to themselves to be held in any capacity other than a trustee of the trust, as there is no change in legal ownership of the trust land. For example, Ms Blue as trustee holds a property on trust for ABC unit trust that is assessed on the trust surcharge rate. The property is transferred from the trust to Ms Blue in her own right and should be assessed at the general rate. Ms Blue must notify the commissioner within one month.

David DAVIS: I move:

1. Suggested amendment to the Legislative Assembly –

Clause 1, page 3, lines 2 to 5, omit “to introduce a new rate of penalty tax for recklessness by a taxpayer or their agent as to the operation of a taxation law or their obligations under certain taxation laws”.

This is the matter of the penalty tax that is in this bill, which we oppose. We see that there are already ample powers for the SRO – investigatory powers and powers to fine at 25 per cent and 75 per cent – and this adds a new device, a new penalty. As the Minister for the Suburban Rail Loop called it the other day, it is a new cudgel to clobber taxpayers.

Ryan Batchelor: She did not say that.

David DAVIS: Yes, she did.

Ryan Batchelor: You said that.

David DAVIS: No, she did. Well, she said the word ‘cudgel’ across the chamber. Under this new provision, which I was talking about, she leaned over towards me and said ‘cudgel’.

Members interjecting.

David DAVIS: No, she did. That was her word. It was not my word. I think it is an appropriate word. I thought it was very apt and very succinct in its description, as a new device to beat –

A member: A spade.

David DAVIS: Be it a spade or a cudgel to clobber taxpayers, with more power for the SRO, and taxpayers in the land are wilting as the pressure comes on in a range of directions from all the various increases in stamp duty and other taxes, land taxes and so forth. It has got to be seen in the context of this surge in tax that has occurred, and now this is a new device brought through in this bill. We seek through the suggested amendment to oppose this particular new change.

Jaclyn SYMES: We do not support this amendment, because what we are doing is wanting to ensure that the commissioner can appropriately respond proportionately to noncompliance across a range of situations and respond to that in relation to its severity. A middle penalty rate of 50 per cent for recklessness provides more flexibility, enabling more tailored and better compliance outcomes. The advice from the SRO is that the threshold for the 75 per cent is too high and therefore does not particularly get used and the 25 per cent standard is not in itself considered adequate to change behaviour. I would note that this is about responding to noncompliance. It is effectively responding to people who are not following the law. It is literally responding to what is happening – it is not widespread – out there. It is an enforcement measure that we hope deters noncompliance. Again, if people did comply with their tax obligations, then a penalty tax would not apply. This will encourage people to comply in the same way that other legislation includes penalties for noncompliance. I think it is incumbent upon us as legislators to make sure that we have appropriate settings to deal with the behaviour that we are trying to discourage. I do not think the opposition are supportive of the conduct, and they expect that there should be consequences. The advice from the SRO is clearly that the current framework does not adequately respond to the behaviour and that these changes will, so we cannot support the amendment.

Georgie PURCELL: I just want to note that all of my questions relate to the new exemptions for people affected by family violence. First off, will the SRO’s guidelines be made publicly available before the provisions commence?

Jaclyn SYMES: Ms Purcell, it is kind of a trick question because they already exist, the guidelines. As you might appreciate, a lot of this already happens in practice through ex gratia and exemptions. Based on the application or things being brought to the attention of the SRO, they can deal with these matters. This is more just formalising it in legislation to reflect what is available already.

Georgie PURCELL: How will the SRO ensure that the process for applying for an exemption is as clear and simple as possible so as to reduce the administrative burden on people affected by family violence?

Jaclyn SYMES: Reflecting on the definition of family violence in the first instance, we do refer to the same definition as in the Family Violence Protection Act 2008, referring to behaviour by a person towards a family member where that behaviour is abusive, threatening, coercive or controlling or in some other way presents a risk to safety. It also includes where a child hears, sees or is otherwise exposed to such behaviour. I know you are familiar with the definitions that we apply. In relation to the evidentiary burden, it is anticipated to be quite low. This is about supporting victim-survivors as best as possible – it is the whole purpose. The new system will actually reduce the administrative burden, because you will not need to come back with an application each year like you might have to with ex gratias.

Georgie PURCELL: Treasurer, will the SRO consult or has the SRO consulted with family violence services such as Safe and Equal, Domestic Violence Victoria or Women’s Legal Service in developing guidelines?

Jaclyn SYMES: As I said, Ms Purcell, this is existing practice being formalised. The provisions are about ensuring that people can access first home buyer benefits or the first home owner grant and buyer scheme amendments under there as well. The provisions apply when persons can establish that they have fled a home due to family violence against them or another family member and that they have not and will not receive any financial benefit from the home. This is in relation to who can benefit from this. As I said, we do not want to make that any more difficult for anybody else. The guidelines have been in existence for some time, and I have not received advice from any of those bodies that they have any issues with the current guidelines. However, we will always work with victim-survivors to make sure that the process is straightforward and as simple as possible. Because this is formalising a process that currently exists, it will be a good opportunity for us to talk to people with lived experience of accessing it to make sure that it is as simple, straightforward and trauma informed as possible.

Georgie PURCELL: My next question is somewhat answered, but just leading into a trauma-informed approach: how will this be done or how is it currently done – for example, limiting how many times evidence must be submitted or how many times survivors must explain the circumstances that they are in?

Jaclyn SYMES: It is a good question. The changes are designed to help victim-survivors in the most common situations in which they ask for access. We have live examples, and the SRO has experience in relation to the barriers that people have faced and they are what we are trying to remove. We expect perhaps because it is formalised and more people are accessing it, it will give us an opportunity to have greater data, greater conversations. It is designed to be easy; it is designed to be straightforward. You would appreciate there is a level of evidentiary requirements, but that is not prescribed for that very reason – it can be some court documents or a police document or stat dec. It will depend on each case, but it is the policy intention. I will ask for regular updates on how it is going to reflect the very issues that you raised, because that is what everyone wants to achieve out of this.

Georgie PURCELL: Lastly, Treasurer, has the government considered the creation of a broader hardships clause within Victoria’s taxation acts, as currently exists in Queensland, New South Wales and the ACT?

Jaclyn SYMES: I am always open to ideas, Ms Purcell. For the purposes of today’s legislation we have changes in relation to family violence, but there are a range of hardship clauses or hardship provisions already available. Some of them are formalised; some of them are more in the ex gratia exemption space where people can apply. You would appreciate that there are so many different situations. I receive a lot that come to me. I then send it to the SRO for advice, and there are a range of situations that you could never create a law to anticipate. If you have genuine hardship issues, there is always an opportunity for that to be considered in a range of measures in terms of accessing benefits such as first home buyer grants, but also when you have got issues in complying with some of your obligations, such as land tax and the like – those types of things. There is a whole unit within SRO that looks at these issues, and it is also something that my office is across.

Council divided on suggested amendment:

Ayes (16): Melina Bath, Jeff Bourman, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Renee Heath, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nick McGowan, Evan Mulholland, Rikkie-Lee Tyrrell, Richard Welch

Noes (20): Ryan Batchelor, John Berger, Lizzie Blandthorn, Katherine Copsey, Enver Erdogan, Jacinta Ermacora, Michael Galea, Anasina Gray-Barberio, Shaun Leane, Sarah Mansfield, Tom McIntosh, Rachel Payne, Aiv Puglielli, Georgie Purcell, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Gayle Tierney, Sheena Watt

Suggested amendment negatived.

Clause agreed to; clauses 2 to 5 agreed to.

Clause 6 (11:10)

Sarah MANSFIELD: I move:

1. Suggested amendment to the Legislative Assembly –

Clause 6, lines 4 and 5, omit all words and expressions on these lines and insert –

‘For section 21AA(1)(c) of the Duties Act 2000substitute –

“(c) either –

(i) the contract for the purchase of the dutiable property is entered into on or after 21 October 2024 and before 21 October 2025; or

(ii) the contract for the purchase of the dutiable property is entered into on or after 21 October 2025 and before 21 October 2026 and the dutiable value of the dutiable property is not more than $1 600 000.”.’.

This amendment is straightforward. It applies a cap on the off-the-plan stamp duty concessions at $1.6 million. This is around three times the median new apartment price. We think this better targets the concession to apply to those buying more affordable apartments, including those wanting to purchase bigger family homes, and we also believe this is what the government has claimed that the concessions are intending to do. There is no luxury apartment housing crisis. These luxury apartments have been a part of the market that has consistently been strong without any government assistance. We think people purchasing these properties with prices exceeding $20 million are willing and able to pay full stamp duty, and Victoria currently cannot afford to forgo the revenue for no policy benefit. We also believe that additional revenue accrued from this amendment could be redirected into housing programs where there is the biggest need, such as reducing the priority waiting times for those trying to escape family violence. This is where we should be directing housing assistance. I commend these amendments to the house.

Jaclyn SYMES: We have had some conversation about this. We will not be supporting the Greens amendment. I have indicated that there is a need to keep an eye on this indeed, but I would disagree with Dr Mansfield’s assessment that there is no policy benefit. The policy benefit is producing more affordable homes because we are encouraging the building of more homes. We will continue to have conversations about these settings, I have no doubt.

David DAVIS: The Liberals and Nationals also will not support these amendments. I understand what Dr Mansfield is trying to achieve with this. But it will affect the aggregate capacity to bring forward projects, and in that sense we will not support this.

Council divided on suggested amendment:

Ayes (6): Katherine Copsey, Anasina Gray-Barberio, Sarah Mansfield, Rachel Payne, Aiv Puglielli, Georgie Purcell

Noes (30): Ryan Batchelor, Melina Bath, John Berger, Lizzie Blandthorn, Jeff Bourman, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Enver Erdogan, Jacinta Ermacora, Michael Galea, Renee Heath, Shaun Leane, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nick McGowan, Tom McIntosh, Evan Mulholland, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Gayle Tierney, Rikkie-Lee Tyrrell, Sheena Watt, Richard Welch

Suggested amendment negatived.

Clause agreed to; clauses 7 to 16 agreed to.

Suggested new clause (11:15)

David DAVIS: I move:

2. Suggested amendment to the Legislative Assembly –

Insert the following New Clause to follow clause 16 –

‘16A Exemption continues if land becomes unfit for occupation

In section 58(2) of the Land Tax Act 2005, for “second” substitute “fourth”.’.

This is a new proposed clause, a suggested amendment that we would insert for the protection of those who have land that is uninhabitable and unusable. This would put in place an arrangement where there is flooding and other natural disasters so that people would not be paying taxes on unusable property for the period. It is a very reasonable proposition. I am thankful to the government for indicating that they have support for this. The amendment was modified in discussion with the government, so I thank them and Mr Newbury, the Shadow Treasurer, for the work done on this. Perhaps without revealing the full outings in party rooms, I should indicate that the Deputy President was very strongly, on the basis of Rochester and other examples, the proponent of this idea that there be proper protections. I think I have said enough. But this is one of those things where there is an opportunity to come to some bipartisan position, and for that I thank the government and Mr Newbury for the work they have done.

Sarah MANSFIELD: The Greens are supportive of this amendment. We think this is a really good initiative. Obviously we are seeing increasingly frequent extreme weather events that are affecting people’s properties, often leaving them with uninhabitable properties for extended periods of time, so we really welcome this amendment.

Jaclyn SYMES: I concur with Mr Davis’s assessment. This has been a collaborative effort. It formalises current practice in many ways, but making it more clear is a good thing. We thank the opposition for their amendment.

David LIMBRICK: The Libertarian Party will also be supporting this amendment. It seems entirely reasonable, and it does seem unfair that someone pay tax on property that they are unable to use. I will also be supporting this amendment.

Suggested new clause agreed to; clauses 17 to 23 agreed to.

Clause 24 (11:19)

Jaclyn SYMES: I move:

1. Suggested amendment to the Legislative Assembly –

Clause 24, lines 14 and 15, omit “12 months but less than 3 years” and insert “the prescribed period or, if no period is prescribed, any period,”.

2. Suggested amendment to the Legislative Assembly –

Clause 24, after line 15 insert –

‘(2A) After section 70F(2) of the Land Tax Act 2005 insert –

“(2A) The period (if any) prescribed for the purposes of subsection (2) must not exceed 12 months.”.’.

I have outlined the reasons for these amendments and do not intend to repeat that.

Sarah MANSFIELD: The Greens will not be supporting this amendment. We think what the government had originally planned to do was better, and this is a watering down of that and walking back from it. We will not be supporting this and urge them to reconsider this approach.

David DAVIS: The Liberals and Nationals will support the government’s position on this. We have spoken to industry and sector people, and we think it makes sense.

Council divided on suggested amendments:

Ayes (30): Ryan Batchelor, Melina Bath, John Berger, Lizzie Blandthorn, Jeff Bourman, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Enver Erdogan, Jacinta Ermacora, Michael Galea, Renee Heath, Shaun Leane, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nick McGowan, Tom McIntosh, Evan Mulholland, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Gayle Tierney, Rikkie-Lee Tyrrell, Sheena Watt, Richard Welch

Noes (6): Katherine Copsey, Anasina Gray-Barberio, Sarah Mansfield, Rachel Payne, Aiv Puglielli, Georgie Purcell

Suggested amendments agreed to.

Sarah MANSFIELD: I move:

2. Suggested amendment to the Legislative Assembly –

Clause 24, after line 15 insert –

‘(2A) After section 70F(2) of the Land Tax Act 2005insert –

“(2A) A residential rental agreement referred to in subsection (1) or (2) must be subject to the restriction that any rent increase during the fixed term of the agreement must not require the renter to pay more than 105% of the rent payable immediately before the increase.”.’.

3. Suggested amendment to the Legislative Assembly –

Clause 24, after line 19 insert –

‘(3A) In section 70F(3) of the Land Tax Act 2005, for “those” substitute “the restriction referred to in subsection (2A) and any other restriction”.’.

These amendments are regarding the build-to-rent provisions in the bill. Build-to-rent is supposed to offer tenants the security of longer term leases. The state government has provided generous land tax concessions to incentivise operators to offer tenants leases of at least three years, but evidently build-to-rent operators are finding some loopholes in the minimum term of lease requirements when claiming these concessions, which this bill tries to address. We commend that, but the Greens believe that there are still too many loopholes. For example, there appears to be nothing stopping a build-to-rent operator offering tenants a choice between two lease agreements for the same dwelling – a three-year lease with excessively high annual rent increases in the terms or a 12-month agreement with the same initial rent. In these circumstances a build-to-rent operator can claim a land tax concession because the three-year lease is genuinely being offered, but the reality is that the tenant is being coerced into choosing the 12-month lease because it will not lock expectations of high annual rent increases into the terms of agreement.

The Greens amendment closes this loophole by requiring that annual rent increases over the fixed term of a build-to-rent lease agreement cannot exceed 5 per cent per annum in order to claim the tax concessions. The amendments do not regulate the starting rental price in a new lease agreement, which may still be set at the premium or high end of the rental market, but it will mean that tenants are genuinely in a position to accept longer three-year build-to-rent leases over shorter term leases, because the longer term leases have to also provide reasonable and stable annual rent increases. If we are serious about incentivising longer term leases in build-to-rent developments, we need to close all the loopholes, and we believe that the Greens amendment helps to at least close one of these.

Jaclyn SYMES: Dr Mansfield, I think we have discussed this a little bit, but we do not disagree with your position that the policy intention is for longer leases. We want secure housing, but we do not think that your amendment will achieve that – in fact it may have unintended consequences. We believe it may restrict the rental increase that could be imposed during a fixed-term lease but not when a new lease is signed. It could have the unintended consequence of incentivising developers to encourage renters to take up shorter term leases, therefore defeating the policy purpose. Imposing such a restriction on build-to-rent operators also could distort competition between the build-to-rent sector, where such restrictions would apply, and the rest of the rental market, where they would not. We share views on the intention of the policy, we just think there are too many concerns with the amendment.

Council divided on suggested amendments:

Ayes (6): Katherine Copsey, Anasina Gray-Barberio, Sarah Mansfield, Rachel Payne, Aiv Puglielli, Georgie Purcell

Noes (30): Ryan Batchelor, Melina Bath, John Berger, Lizzie Blandthorn, Jeff Bourman, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Enver Erdogan, Jacinta Ermacora, Michael Galea, Renee Heath, Shaun Leane, David Limbrick, Wendy Lovell, Trung Luu, Bev McArthur, Joe McCracken, Nick McGowan, Tom McIntosh, Evan Mulholland, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Gayle Tierney, Rikkie-Lee Tyrrell, Sheena Watt, Richard Welch

Suggested amendments negatived.

Clause postponed; clauses 25 to 43 agreed to.

Progress reported.

Suggested amendments reported to house.

The PRESIDENT: The Deputy President reports that the committee has made progress in the bill and suggested certain amendments to the Assembly and asks leave to sit again. Pursuant to standing order 14.16, a message will be sent to the Assembly requesting them to make the amendments suggested by the Council. The question is:

That the Council resolve itself into a committee of the whole later this day.

Motionagreed to.