The Andrews Government will no longer pay rates on social housing properties and impose a 1.75 per cent levy on developers in an effort to drive up much-needed funding for affordable and public housing.
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The new levy and rates decision forms a Social and Affordable Housing Contribution (SAHC) released by the Minister for Housing Richard Wynne.
In a statement, the Minister said from July 2024, "all newly built developments with three dwellings or more and three or more lot subdivisions will contribute 1.75 per cent of the as-if-complete project value to the Social Housing Growth Fund. The change will affect less than 30 per cent of all residential planning permits."
Social housing properties will join schools and hospitals in being exempt from council rates from July 2023.
The initiatives will apply to local government areas in metropolitan Melbourne and the regional cities of Greater Geelong, Ballarat, and Greater Bendigo.
Other councils will be unaffected.
The SAHC will provide $800m revenue per annum and build 1700 new homes each year, the government says.
City of Ballarat mayor Daniel Moloney says there is broad agreement on the need for improved social housing funding and supply, but an unintended outcome of the rate change might be excluding low-income renters from private ownership.
"This is frustrating because it should be a good news story, we do need that social housing support in Ballarat," Cr Moloney says.
"From a council point-of-view it's not something we've been brought up to speed on, from the government's thinking.
"We're almost entirely dependent on rates as our key revenue, we don't have fees and charges like the inner-city councils.
"Based on 2000 social houses in Ballarat, that's just over $2m per annum (it will cost). Around 25 per cent of our residents rent, many who need lower cost options.
"We need more affordable housing, and a better mix, but we also need first home buyers to be able to transition to ownership."
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