Cladding levy adds millions to the cost of development

The commencement of the Building Amendment (Cladding Rectification) Act 2019, which will take effect on the 1 January 2020, will see millions of dollars added to the cost of projects across Victoria. 

Hundreds of projects already underway will retrospectively incur significant cost increases. Many of these projects received approvals prior to the announcement of the Cladding Rectification Fund or the introduction of the Building Amendment (Cladding Rectification) Bill 2019 into the Parliament.

Cressida Wall, Executive Director, Property Council Victoria, says the retrospective nature of aspects of the legislation are particularly problematic.

“It is essential that an exemption from the increased rates of the Building Permit Levy is implemented for those developers that had projects committed and already under development, who are now facing unavoidable and unforeseen cost increases from 1 January 2020,” Ms Wall said.

“The retrospective components of the Act are placing developments, companies, homes for Victorians and jobs under threat.”

“The Property Council supported the Government in its proactive approach to addressing cladding and consumer certainty in Victoria, however this rushed legislation is now placing the industry, and the jobs it supports, at great risk.”

"While we agree that addressing combustible cladding is essential, changes to the Building Permit Levy, which place the viability of the property industry at risk, are not the solution.” 

“This levy will drive up prices on future projects as developers attempt to offset charges not factored into current projects. This is a bad outcome for Victorians and a bad outcome for the property industry, Victoria’s largest employer,” Ms Wall said.


Media contact: Emily Young | M 0447 020 329 | E eyoung@propertycouncil.com.au