Tom Elliott says the Victorian government’s new development levy to help pay for social housing is one of the “dumbest” political proposals he’s ever seen.

He says government needs to go back to the drawing board.

Planning Minister Richard Wynne on Friday announced a 1.75 per cent contribution will be imposed on new developments to pay for the construction of thousands of social and affordable homes from 2024.

Tom Elliott said it was essentially a tax on first home buyers.

“The government will try and tell you the tax is on the developer, not the buyer,” he said.

“But if the government adds to the cost of housing, what is the developer going to do?

“They’ll add on that cost to you, the buyer.

“It is one of the dumbest state government policies I’ve ever seen.”

Tom Elliott said the policy itself had a noble aim, but completely flew in the face of several other pieces of government legislation that intended to help first home buyers get into the market.

“I am all for building more social housing,” he said.

“I actually think the fact we have so many people who are homeless, or waiting on social housing, is an indictment on our society, it really is.

“But taxing first home buyers is not the way to do it.”

Press PLAY below to hear Tom Elliott explain the flaws in the policy

Matthew Kandelaars, CEO of the Urban Development Institute of Australia, said Tom Elliott had “hit the nail on the head” and home buyers would ultimately end up paying more for property.

“The characterisation of this as a developer tax is patently false,” he said.

Press PLAY below to hear him explain

Picture: Getty iStock