Vacancy tax’ pitched to solve rental affordability crisis

Aussies are being forced into homelessness whilst properties bought by Chinese investors, sit empty. This is a national disgrace! Why are Australians being forced onto the street so that Chinese investors can get richer? 
RENTAL affordability is driving Australians onto the streets, community organisations say, and one advocate has called for a controversial solution.
With thousands of homes sitting vacant, the idea of a “vacancy tax” has been floated to encourage owners to open their empty properties to an increasingly desperate rental market.
The latest rental affordability index (RAI) conducted by SGB Economics and Planning declared Australia’s housing affordability situation was in crisis.
The study of rental affordability in Australia’s capital cities, released today, showed Sydney was still Australia’s least affordable city for rental accommodation, with Hobart coming in second. But of all cities Melbourne saw the greatest decline in affordability since 2013.
Community Sector and Banking chief executive Andrew Cairns, who was also involved in the publication, said the rental crisis was pushing people out of the market altogether.
“People in the lowest income households are being pushed out of the rental market, and into poverty and homelessness — the situation is most dire in Sydney,” he said.
Speaking about the numbers, Adrian Pisarki, executive officer of National Shelter, the peak advocacy group for housing and security for low income people, said it was concerning that there was no “national strategy” to tackle housing affordability.
“Low income households continue to face unaffordable rents and high levels of housing stress despite some improvements in the rental market — additional supply in capitals has not eased rental affordability for low income houses,” he said.
“We are most concerned that there is no national strategy to tackle housing affordability, especially when we see that additional supply is not reaching low income households, and increases in homelessness are being reported.”

But an overlooked supply source for rental properties could hold one answer to making housing more accessible and affordable.

This is inner Sydney. The red bits are ‘extremely unaffordable’, but don’t worry, the orange ones are only ‘severely unaffordable’.Source:Supplied
Tens of thousands of Australian properties are sitting vacant, many owned by investors who keep them as a tax write-off and are reluctant to commit to the hassle of managing a rental property for little extra financial gain.
The actual number of empty properties is not officially recorded, but a 2015 report conducted by think tank Prosper Australia indicated there were more than 80,000 Melbourne homes unoccupied. A similar study in NSW put the number of vacant dwelling in Metropolitan Sydney at 90,000.
The level of vacancies is believed to be even higher in Sydney, where many foreign investor-owned city apartments sit empty, SGS Economics & Planning senior associate Ellen Witte told news.com.au.
“I think it’s a measure that’s only effective to alleviate some of the housing stress in specific geographic locations, particularly inner city areas where there are high numbers of vacant units, but in those areas it would definitely make a difference,” she said.
A proposal for a vacancy tax was taken up by local government in Vancouver where from next year property owners will be required to declare the occupancy of their property, and taxed one per cent of the value of investment property that are unoccupied for six months or more.
Ms Witte believes if such a measure were introduced in Australia’s capitals, owners would be incentivised to rent out their properties, therefore increasing the supply of rental dwellings.
“Where property owners do not (rent out their properties), the tax revenue could be used to reinvest back into affordable housing,” she said.
But while a vacancy tax could be effective in certain areas, housing affordability is a bigger problem.
“It’s a wider problem than that, this would by no means be a measure to address the wider affordability issue,” Ms Witte said.
“It needs a multi-layered approach. We need review and reform of the existing Australian tax regime, especially around capital gains tax rebate and negative gearing, and that’s really to make the housing market more attractive to first home buyers and take out some of the inflationary forces that is created by those tax measures.”


Investors are buying units in Sydney and leaving them empty, but a new tax could change that. Picture: Supplied 

The federal government has stalled on plans to address housing affordability, with efforts to address tax breaks around property ownership left by the wayside early in Malcolm Turnbull’s prime ministership.
Ms Witte said the community housing sector also has a role to play, but there is little the sector can do without government support.
“I think the government is very scared to do anything about it,” she said.
“There’s a need to increase the stock of social housing to at least 10 per cent of all dwellings being built, and in addition to that there’s a need to increase the stock of affordable housing, to provide housing at sub market rents.”
The coalition of welfare and financial groups that have banded together to release the RAI have called on governments, companies and philanthropists to collectively use their power to create “sustainable solutions”.
Mr Cairns said there was “a dire need for innovative financial models” to support more affordable housing.


Hobart is the second least affordable rental city.Source:Supplied

http://www.news.com.au/finance/real-estate/vacancy-tax-pitched-to-solve-rental-affordability-crisis/news-story/218177780ac4b5ed67667386208f2331

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