Friday, 2 May 2014

Melbourne units face $1000 slug http://www.afrsmartinvestor.com.au

Melbourne units face $1000 slug

Michael Bleby
Photo: Mike SegarExtra funds are needed for the city to develop open and green spaces as the population of the inner city grows.

Central Melbourne developers could be slugged an extra $1000 in contributions for each apartment under a proposal before the City of Melbourne.
The move puts state Planning Minister Matthew Guy in an awkward position just months before a state election.
The Australian Financial Review can reveal a move to extend a developer contribution introduced last year on residential towers built across the Yarra River in Southbank.
City of Melbourne councillor Stephen Mayne will table the motion before the end of the financial year.
Extra funds are needed for the city to develop open and green spaces as the population of the inner city grows. ­
Melbourne has no central business ­district charge on inner-city residential developments and the proposal would bring Melbourne in line with Sydney and Brisbane, Mayne said.
“I’m confident that when all the facts are considered, there will be political support for a modest developer ­contribution on residential apartments in the CBD, Southbank style,” Mayne told the Financial Review.
“They’ll be much smaller than ­Sydney. Melbourne’s going to retain its east coast-leading position of being a low-tax environment for developers.”
In the Sydney CBD, all residential, commercial and retail developments are charged 1 per cent of the construction cost.
In Victoria, all developments pay 5 per cent of the value of the footprint towards the provision of open space.
This payment is insufficient to keep urban space in proportion to the growing population when the ­development is a tall apartment block on a small area of land, Mayne said.
“In Brisbane, residential and non-residential developments in the CBD are subject to infrastructure charges,” he said.
“The per-apartment change for residential apartments varies between $19,000 and $27,000.”
The motion requesting Mr Guy to extend the Southbank developer levy to the CBD looks likely to pass the ­11-member council despite opposition from lord mayor Robert Doyle.
Last year, Doyle was one of five councillors who recused themselves from voting on a plan to raise the space contribution to 8 per cent from 5 per cent because they had received donations from developer Central Equity.
Read the full story at afr.com.au