The Big Three of Melbourne community property firms are facing an economic squeeze, with their shares down more than 25 per cent in the past week.
Key points:A $1.5 billion tax incentive for community property businesses expired on TuesdayThe community property industry, which includes more than 100 community properties, has been hit by the government’s tax amnesty program for new homes, with shares down 27 per cent since July1, according to the latest figures.
The state government says it will allow businesses to return to business if they earn more than $1 million, but it’s understood there will be a limit.
The Big Three include Melbourne Community Property Holdings, which owns more than 200 community properties across Melbourne, including the Yarra Riverfront and the Gold Coast.
The industry is still struggling with the Government’s new tax amnesty plan, which saw the taxpayer-funded subsidy for community properties reduced from $1,200 to $900 a year.
“The impact of the new program has been felt by community property owners, which are experiencing a severe loss of revenue,” Melbourne Community Development Minister John Rau said in a statement.
“Community property owners are particularly hard hit by this reduction in subsidy, and the government is committed to supporting community property developers to return back to business.”
In a statement, Mr Rau did not comment on whether the industry’s shares were down because of the Government amnesty.
The Government has also axed the Community Infrastructure Fund, which provided $800 million for community infrastructure projects.
Mr Rau’s statement also said that the Government was committed to reducing taxes for all community property taxpayers, including local councils.
The Australian Taxation Office says the government will be able to impose a surcharge of up to 20 per cent on new property sales.
A spokesperson said the Government would be reviewing the impact of these measures and making further announcements on the community property rebate.
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