Charge the Car Parks

A flat land tax surcharge on surface car parks within 1 km of a metropolitan train station does not fix land-banking because a flat annual cost is a number an owner can price into how long they are prepared to wait. If the land appreciates faster than the surcharge, waiting still wins, every year, forever. The cumulative surcharge inverts this: it starts at 2% of unimproved land value in year one and rises by 2 percentage points each year the site remains in a single-use commercial category. By year five the holding cost is 10% of land value annually; by year ten, 20%. For sites within 400 metres of a Suburban Rail Loop station, the increment itself can compound rather than simply add, putting indefinitely timed land-banking on an exponential cost curve. The surcharge resets only on redevelopment to a mixed-use or residential outcome, or on sale to someone who will develop. There is no fourth option: build, sell to a builder, or sell to the state via VWHF at the discount a structurally loss-making holding now commands.

The surcharge requires primary legislation establishing it as a separately assessed impost administered by the State Revenue Office, with the Commissioner of State Revenue as the competent authority for assessment, dispute, and enforcement. The legislation must define: (1) the affected land use categories (surface car park, vacant lot, single-storey retail on a tower site, light-industrial use on land zoned mixed-use); (2) the 1 km and 400 metre station-radius triggers; (3) the reset conditions (active development application, building permit, or completion of mixed-use development); (4) the permit-banking anti-avoidance rule (a statutory time-limit on how long an active application pauses the surcharge before the clock resumes); and (5) the 12-month transition period from the date of enactment. Victoria's Vacant Residential Land Tax and the Windfall Gains Tax both provide existing administrative templates for land-use-based surcharges administered by the SRO.

The statewide open data count of approximately 40,008 dedicated station car parking spaces covering around 51 hectares is the baseline for what is affected. The surcharge is not designed to collect revenue indefinitely: the policy succeeds when owners build or sell rather than continue paying, making the revenue collected a measure of how slowly the mechanism is working, not how well. Revenue that is collected flows into the Transit Capital Fund, which funds the BRT corridors and station-precinct infrastructure that make car-independence viable in the precincts where the surcharge is applied. The surcharge's calibration point is that it must exceed any plausible annual land appreciation within a single parliamentary term. At 2% rising by 2 percentage points annually, it overtakes a 10% per annum land appreciation rate within three years, which is above the long-run average for station-adjacent commercial land in Melbourne.

The Vacant Residential Land Tax experience provides the clearest cautionary data: the Property Council has documented owners routing around VRLT through ambiguous exemption categories and a non-disclosure penalty that is rarely enforced. Tax advisers have found that the permit-banking exploit (lodging a token development application to pause the clock) is the primary avoidance mechanism, and the legislation must close it with a hard statutory time-limit on how long an application pauses the surcharge. The Detroit risk is also real: where holding "vacant land" is taxed more lightly than holding an underused building, owners demolish rather than redevelop. The surcharge is keyed to land use category, not to the presence of a structure, so demolishing a building does not lower the rate or reset the clock: a cleared lot in a single-use commercial category is still a single-use commercial holding.

Victoria's Windfall Gains Tax already taxes rezoning uplift at up to 50%, with a 62.5% marginal rate in the $100,000-$500,000 taper band: this is a stronger one-off instrument than the cumulative surcharge, which operates on the ongoing trajectory of appreciation rather than the moment of rezoning. The Anti-Land-Banking Surcharge targets what the WGT does not reach: land already zoned for higher density that declines to develop. The Vacant Residential Land Tax expanded statewide from January 2025 provides an existing administrative precedent for an SRO-administered land-use surcharge with similar exemption and enforcement mechanisms. NSW's Commercial Property Levy discussion paper (2024) proposed a similar annual charge on underutilised commercial sites near transit, providing a recent comparable jurisdiction policy reference.

This requires a parliamentary majority to pass. A Fusion MP introduces the Land Banking (Transit Precinct) Surcharge Bill as a Private Member's Bill so the fully drafted model is on the public record, and uses supply negotiations to extract a government commitment to a costing by the Victorian Government Actuary of the surcharge's projected annual yield and the projected acceleration in development approvals in transit precincts. The costing is the one-seat deliverable: it shifts the surcharge from a policy position to an evidence-backed revenue measure with a price tag and an economic impact estimate, making it significantly harder for the government to dismiss it as theoretical. In a minority parliament, including the surcharge in the next Planning and Environment Act amendment bill, as an upper house committee amendment, is the legislative vehicle that avoids needing a standalone majority.