WHITTLESEA developers expect taxes limiting development in the urban growth boundary to change.

The Coalition has signalled it will change the Growth Areas Infrastructure Contribution legislation to avoid situations where banks demand full payment up front.

The problem arose in Wollert, when a property sale fell through after the National Australia Bank backed out of an approved loan. As land purchased in the urban growth boundary is taxed through the GAIC at $95,000 a hectare and the law requires 30 per cent of the GAIC to be paid upfront, the bank’s decision caught the developer short. The bank did not respond to requests for information by deadline.

Some banks have refused to lend money to developers unless all of the tax, which can be in the millions of dollars, has been paid upfront.

Executive director of the Urban Development Institute of Australia, Victoria, Tony De Domenico said the consumer was in a tough position if banks required the payment upfront.

“Big developers with unlimited cash flows will tend to dominate, and that will affect competition,” he said.

Taxed Out spokesman Michael Hocking said the group wanted changes to the GAIC promised before the election.

“We thought it would be announced in the first 100 days, and the sooner it happens the better,” he said.

Planning Minister Matthew Guy said the government was drafting legislation.

“The government will implement its election policy to change the GAIC to be paid fully at the Statement of Compliance stage,” he said.

Mr Guy said the changes would mean banks would not require the tax to be paid up front.