I rise to speak on the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Bill 2021. I will be supporting this bill today. The introduction of a windfall gains tax has long been needed. Over the years we have seen billions and billions of dollars being transferred from the pockets of taxpayers to the pockets of lucky landowners, a bit like winning Tattslotto. This bill will address this.
A windfall gain is when land is rezoned to expand its permitted uses and economic potential that results in immediate and significant increases in the land value. This increase in land value is a windfall gain that accrues solely to the landowner over and above any regular income or profits earned from the land. This tax will apply to an uplift in the land value resulting from a planning scheme amendment that changes the zoning of the land. The change in value from the rezoning will only be taxed if it is over $100 000, and owners of residential properties of up to 2 hectares are exempt from paying the tax.
An important aspect of this tax is that the owners can defer the payment. All owners will have the ability to defer payment, with interest, for up to 30 years or until the property is sold or transferred, whichever occurs first. The applicable interest rate will be the 10-year Victorian government bond rate. This means that if a large farming property previously valued at, say, $1 million is rezoned to become residential after lobbying of the local council, the owner, who now possesses a property with a value of $40 million, does not have to pay the windfall gains tax immediately. Instead they can wait until the time they choose to sell the property to a potential developer and then pay the tax after receiving profits from the increase in its land value.
Charitable institutions will be eligible for an exemption from the tax if they meet a number of requirements. This is a sensible provision. In recognition of the need for further rental developments, build-to-rent developments which are new or substantially renovated buildings with at least 50 self-contained dwellings will also be exempt and be eligible for a land tax exemption. The windfall gains tax will commence from 1 July 2023, providing the industry with enough time to make a smooth transition.
This bill will also be addressing some other things. This bill will introduce a keno tax. Online keno games will have to pay tax for customers based in Victoria. Online keno games has been a space of significant growth, and while in-person games are taxed, online keno games have not been. Once again, in my view, this is a sensible provision.
I originally had an amendment to this bill, and it was around wheelchair taxi fleets. We withdrew the amendment after discussions with the government and in fact discussions with the Treasurer. This Windfall Gains Tax and State Taxation and Other Acts Further Amendment Bill 2021 includes provision to extend the motor vehicle duty exemption to private vehicles that are specifically converted for wheelchair access within 12 months after registration or transfer. I brought this to the attention of the Treasurer and pointed out that the taxi fleet which does wheelchairs does not have that same exemption. I thank the government, and I thank the Treasurer. What will be coming up is that with the current motor vehicle duty exemption for wheelchair-accessible vehicles not extending to vehicles providing unbooked commercial passenger vehicle services currently—taxis—and given the importance of maintaining the number of wheelchair-accessible vehicles, subject to cabinet process the government intends to extend the existing exemption to taxis in the upcoming Victorian budget 2022–23. I thank the government for recognising the very serious issue of maintaining our wheelchair fleet for those with disabilities throughout Victoria. I think that will be all that I will say today.