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Calls for Empty House Tax Review

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There are calls for an empty home tax to be reviewed and enforced across Australia after Victoria raised $5.4 million from a possible $120 million last financial year.

There were more than 20,000 empty homes in Melbourne and that number could be even higher in Sydney and Brisbane according to research from Prosper Australia.

However Victoria was the only state to impose a vacant residential land tax at 1 per cent for properties left empty for more than six months in a year in Melbourne.

Australia’s housing market was deemed “severely unaffordable” and among the most expensive in the world, while rent and house prices also went up last year.

Prosper Australia director of research Karl Fitzgerald said there was a missed opportunity—although the tax was brought in, it was not properly enforced and investors were still choking the supply.

“Quite a few housing advocates are simmering with rage because we’ve seen such a dramatic rollback of housing supply,” Fitzgerald said.

“More and more people are having their finance approved but cant find property to buy.

“We found at a minimum 20,000 properties were vacant [in Melbourne] and use zero litres of water over a 12 month period. Yet only 900 people self reported [for the tax].

“The government needs to impose fines, there’s no real penalty for not declaring.

“There’s a whole pile of issues [around this tax] it only included inner and middle ring properties, so it primarily targets foreign investors who own empty apartments but ignores the big land banks. ”

A similar tax was introduced in Vancouver, Canada where almost $40 million was raised to fund affordable housing initiatives and saw a reduction in empty properties.

The tax led to 22 per cent fewer vacant properties in 2018 compared to a year earlier and a 7 per cent increase in tenancy.

City of Vancouver mayor Kennedy Stewart said the main objective of the tax was to address housing affordability.

“For those who choose to keep their properties unoccupied, we appreciate their contributions to the funds that are supporting various, much-needed affordable housing initiatives across the city,” Stewart said.

“The main objective of Vancouver’s Empty Homes Tax is to influence property owners to put their empty properties on the rental market and the data shows that is happening.”

Prosper Australia director of research said more could be done in Australia, not just the inner Melbourne region.

“We have tried to get access to this [vacancy] data interstate and it hasn’t been easy,” Fitzgerald said.

“We are surprised the government hasn’t really been on the front foot if they were genuinely serious about addressing affordable homes.”

Related: Mortgage Stress Rises as Debt Soars for Older Australians

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Article originally posted at: https://theurbandeveloper.com/articles/calls-for-empty-house-tax-review