The tax will now be paid by developers rather than landowners when they sell their land.

On Friday, Planning Minister Justin Madden released draft legislation on the tax, known as the Growth Areas Infrastructure Contribution (GAIC), which will be used for infrastructure such as roads, schools, parks and public transport in new suburbs.

Landowners whose land was inside the 41,000-hectare expansion to Melbourne's urban boundary had said their land would not increase in value when it was rezoned, and the GAIC would ruin them.

After months of pressure, including a protest on the steps on Parliament in June, Mr Madden said last week the tax would "apply to those who profit from subdividing and developing land brought into the Urban Growth Boundary".

Mr Madden said the Government would write to landowners offering them a chance to discuss the proposal and how it affected them.

Michael Hocking, a spokesman for Taxed Out, a group formed to fight the proposed tax, said sellers would still see a reduction in their property's value under the revised tax.

"I don't see anything has changed because it's the same transaction that the Government's targeting. Under this scenario, small acreage maybe suffer a loss in market value as there is a liability to the purchaser that must be considered when negotiating the purchase."

Key details of the draft legislation include:

The tax is payable once on any parcel of land.

Does not apply to land less than 0.41hectares.

Will not apply when the land is sold for lots between 0.41 hectares and twohectares, if the lot has a house on it. However, GAIC will apply when the land is subdivided or developed.

It will not be paid if the land is deemed 'undevelopable" due to native vegetation or other factors.

Property in the path of the Outer Metropolitan Ring/E6 Transport Corridor or Regional Rail Link is not planned to be zoned for urban development and the GAIC will not apply.

Land currently classified as a 'township zone' will not be charged.

The tax will not be paid on land where building permits for a new single dwelling, and building permits for work with a value of less than $1 million.

The State Government says 284,000 homes need to built in growth areas to cater for population growth.

The final boundary will be presented to Parliament later this year.

The draft legislation is available for public comment until Monday, November 2, 5pm.

Details: www.dpcd.vic.gov.au/planning