THE residential vacancy tax previously limited to Melbourne only has been extended to regional areas, immediately provoking strong reactions from the State Opposition, the Victorian Farmers Federation (VFF) and other housing industry stakeholders.

The announcement was made by Victorian treasurer, Tim Pallas, who revealed the changes at an industry breakfast earlier this week and it was believed he did so without the premier’s knowledge, also raising questions about her cabinet and the communication in her ranks.

Mr Pallas also announced the tax would be broadened to include land waiting to be developed.

The Opposition said the expanded tax “torches” the property industry and pointed out they were effectively the 51st and 52nd new or increased taxes introduced by the government since 2014.

The Property Council of Australia said its partnership announced with the government when it released its Housing Statement two weeks ago had been “set on fire”.

Property Council of Australia chief executive, Mike Zorbas, said the hidden tax grabs were “a major trust burner”.

“Here’s a tip for State Governments trying to reach ambitious housing goals in partnership,” he said.

“Don’t do a Victoria.”

VFF president, Emma Germano, said she has written to the treasurer outlining their concerns toward the policy announcement, especially how it could unfairly impact farmers who are unable to keep farmhouses occupied throughout the year.

“There are many farmhouses in rural Victoria that often remain vacant due to the inherent challenges of attracting and retaining a workforce in these areas,” she said.

“Farm businesses rely heavily on seasonal and transient labour, making it difficult to maintain continuous occupancy in farmhouses throughout the year.

“If this tax was extended to these farmhouses, farmers will be unfairly punished for factors that are totally beyond their control.”

Real Estate Institute of Victoria (REIV) chief executive, Quentin Kilian, said he was “disgusted by the fact we’ve not been engaged.”

“This … announcement to extend, the already contentious, vacant property tax to regional Victoria and double the vacant land tax is just another regrettable demonstration of poor property policy development, and shortsightedness from the Victorian Government,” he said.

“Each time a new tax or a new regulation is introduced, it beats confidence out of one of the state’s most important economic contributors.

“Less than a fortnight ago, the government released it’s much vaunted ‘Housing Statement’ and … we already have two new property tax increases announced.”

Mr Kilian said the REIV noted the treasurer was “seeking to change investor behaviour” but said it would have the opposite effect.

“We can assure Mr Pallas, and his team of policy makers, that the only behaviour this idea will initiate is for more landowners to sell-up and continue to turn away from Victoria for investment,” Mr Kilian said.

Shadow treasurer, Brad Rowswell said, “The first act of Victoria’s newly minted Minister for Economic Growth Tim Pallas is to announce new and increased taxes, without consultation or any explanation as to how this will help Victorians struggling to afford a home.”

The original tax was introduced on January 1, 2018 and Ms Germano said she had asked for “further clarity on how this policy extension will be implemented in rural areas and how it will account for the unique circumstances of farmhouses”.

“I have also sought assurances that the government will consider the farming sector’s concerns and the potential adverse effects on our businesses before finalising and implementing this policy,” she said.

Ms Germano added that under the existing rule that applies to vacant houses in Melbourne, a property must only be vacant for six months, which is not required to be continuous.

“This rule would trip-up many farmers who have houses that are dedicated for seasonal workers,” she said.

“It would also unfairly treat farmers who haven’t been able to secure permanent workers due to the tight labour market conditions we are facing.

“The VFF fully supports the need for increasing the supply of housing in regional areas. This is critical to solving workforce shortages in the agricultural industry.

“However, farmhouses are used by businesses to ensure their own labour supply. It is totally inappropriate and unfair to penalise farmers when they are not able to keep houses occupied year-round.”

“The government needs to think carefully about the impacts of their policies before blurting out announcements.”