A proposed new windfall tax on rezoned land has been labelled 'discriminatory' and 'unfair' to farmers.
Victorian Farmers Federation president Emma Germano said there was plenty of confusion amongst the farming community about tax because there has been "zero detail" since it was announced.
"This tax couldn't come at a worse time for regional Victoria," she said.
Ms Germano said the VFF was deeply concerned the implications of this tax had not been thought through, and it was unclear how much revenue it will actually take away from regional communities.
She described the tax as "manifestly unfair".
A farmer, who has land about 4.5 kilometres from Warrnambool, said he was worried about how it will affect him and his family.
He fears he will be forced to sell his land to pay the tax bill that will be applied if his land is rezoned - something the government or council can do without him having a say.
The farmer, who doesn't want to be named, said he would be hit with the tax even if he didn't want to sell his land.
A rezoning, for example, could increase the value of a farm from $4 million to $15 million overnight because it can now theoretically be used as a housing estate.
He said if his land got hit with millions in windfall tax, his farm could become completely unviable in the bank's eyes. "I'm wiped out," he said.
Ms Germano said under the new tax, anytime farmland was rezoned, a tax liability would be created on the balance sheets of farm businesses, impeding its ability to borrow money to grow or maintain their business.
The Warrnambool farmer said it was thought that the tax might be changed to be payable when the land was actually sold rather than when it was rezoned, but he said the trouble with that was it was "always hanging over your head".
"Our superannuation is in our land and we sell it to our children to give us an income for the rest of our lives. If we sell it to our kids, the tax is due. It's going to make all these deals unviable. That's our greatest threat," he said.
"Our solicitors are saying the only ones that aren't affected are around Melbourne."
The farmer said he was finding it hard to get scant details about the new tax that was coming in July.
"That's what's worrying us. We want to keep farming and we can't get details on the tax," he said.
"We don't mind paying tax, but 50 per cent is extraordinary.
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"All it's going to do is create a massive liability to everybody that's around the fringe of Warrnambool, and there's plenty of us... and around Ballarat, Geelong and Gippsland.
"It's alarming for us. They can call us rich farmers, we're not interested in developing land, but what it does is all the cost is going to go onto mum and dad couples that want to buy a block of land and build a house."
He said there was nothing stopping the state government rezoning land around cities just to get the tax. "If they do big areas around Warrnambool, Ballarat and Geelong, they could get hundreds of millions of dollars in tax," he said.
Harris and Wood Real Estate sales representative Dominic Bushell said his major concern was farmers in Warrnambool and regional Victoria.
"They won't be able to reinvest to make their business viable, which means there could be food security issues moving forward," he said.
"If landholders decide against selling or developing the land altogether then there's going to be further strain on the housing shortage in regional Victoria, particularly in Warrnambool.
"That's going to have a flow-on effect to trades people.
"It's discrimination against regional Victorians. In certain parts of Melbourne this tax won't apply."
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