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Peak body pushes to remove Windfall Gains Tax to fuel investment growth
New research from Mandala Partners found that abolishing the Windfall Gains Tax (WGT) could inject up to $1.4 billion in private investment in Victoria each year by 2030.
The WGT tax applies only in Victoria and, according to the government, was implemented to “capture a fair share of value uplifts for the community,” applying to certain types of land that require rezoning for residential or commercial use.
Despite the intent of the tax to spread value back into the community, it raised just $15 million in revenue in 2024–25.
Additionally, the research indicated that scrapping the tax could generate $370 million in economic activity in Victoria, introduce 3,100 new homes annually, and support 2,700 jobs.
Data found that, on average, a Victorian project, the WGT reduces returns by 3 percentage points, pushing costs below the industry-standard threshold, which causes them to be scaled back, delayed, or even cancelled.
The Property Council of Australia said Victoria was the most harshly taxed property sector in the nation, with research finding that 42 per cent of government revenue comes from property taxes.
Property Council Victorian executive director Cath Evans said the tax was another roadblock keeping homeownership out of reach for many Victorians.
“Instead of raising meaningful revenue for the state, all the Windfall Gains Tax does is kill projects and deter investment, pushing money for new homes to other states,” Evans said.
“The evidence against WGT is overwhelming. It’s doing real damage, and the cost to housing supply and jobs far outweighs the small amount of revenue it brings in.”
Evans said that since the introduction of the tax in 2021, international and domestic investors had chosen jurisdictions with more stable tax settings, and the next election was a chance to reset.
“Abolishing WGT, along with unlocking global investment opportunities, would be a clear signal that the next government is serious about fixing broken tax settings and getting housing and investment moving again,” Evans concluded.