A prominent development lobby group is concerned property owners will bear the brunt of any changes to how infrastructure projects are funded in Australia.

The Urban Taskforce said it supports a push by the current Federal Government to explore different methods to fund infrastructure projects, however it is concerned about what that could mean for homeowners.

“The Urban Taskforce welcomes the Federal Government’s announcement that they are looking at innovative ways to fund infrastructure,” Chris Johnson, Urban Taskforce chief executive officer said. .

“But we are concerned that this could become a tax on new housing focussed only on land owners and developers rather than a broad based levy shared by all beneficiaries of new infrastructure,” Johnson said.

Johnson said the group is concerned that if the government looks to levy funds from developers or owners that are in proximity to infrastructure projects then there is a likelihood owners will be worse off, while developers may simply walk away.

“There has been much discussion about the uplift on the value of individual houses near new railway lines where the density has been increased. Our concern is that excessive taxes on the uplift will kill the feasibility of a project and that individual house owners will not go through the dramas of relocation without a substantial windfall,” he said.

“When the market is bullish as it is now there may be opportunities to capture come of the uplift but once the market subsides, the tax on new housing will drive development to areas away from the areas being taxed.”

Johnson said the Turnbull government could learn from their counterparts in the United Kingdom and their approach to new funding models.

“London’s massive Crossrail project is often used as an example of value capture but this project rejected the potential to tax uplift on new development close to stations in favour of a broad based levy across all businesses in London along with a small levy on all new development across London.

“A detailed report on funding options for Crossrail 2 by PwC rejected the taxing of new development close to stations as this could stop development to the detriment of the city as a whole.”