Page 1564 - Week 05 - Tuesday, 8 May 2018
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Vacant properties are properties that are not being used. They are properties that are being denied to tenants. The result is a lowering of rental vacancy rates. About 15 years ago, a normal rental vacancy rate was considered to be something between three per cent and five per cent. As of March 2018, according to SQM Research, there was a rental vacancy rate of 0.6 per cent in the ACT. That is pitifully low. If you added to that the 1.5 per cent of properties that the government estimates are long-term vacant properties, you would get up to something around two per cent, which would be, while not a high rate, a more normal and more manageable rate.
Every home held off the rental market means someone queuing day after day trying to get a home. It means rents are a bit higher. Eventually, these things flow through the market and result in more people being homeless in Canberra. Sadly, the land tax in the ACT has been a tax targeted at the large majority of landlords who do the right thing and rent out their investment properties. Those who withhold their properties from the market just do not pay it.
In the past we have been creating an extra incentive not to rent out your property. Other jurisdictions in Australia have fixed this problem, but until the bill goes through, the ACT has not. With this problem in mind, back in March 2017 I put forward a private member’s bill that called on the government to review the current taxation treatment on vacant properties with a view to extending current land tax requirements. This bill is the result. The Greens are very pleased about that.
I want to touch upon one of the issues that Mr Coe raised about levying land tax on vacant properties: that it might hit people who have their properties vacant for good reason. I did say in my speech on the private member’s motion that some exemptions would be needed. An obvious case, as Mr Coe mentioned, is a home getting major renovations. This could be where the owner-occupier moves out of the house while it is being renovated or a landlord takes the property off the rental market for a while because it needs a new kitchen or bathroom or whatever. Clearly, that is a reasonable exemption, and it is part of the legislation. The other issue is the obvious one: there is a two-year exemption when the owner dies.
Mr Coe mentioned the situation of someone moving possibly into retirement accommodation. In many cases, the house will be sold in that instance, because the cost these days of moving into retirement accommodation is such that for many people there is no choice: they must sell their house if they are going to afford retirement accommodation.
For other people who have the means to be unsure about what they are doing, I would point out that it is possible to rent out houses on a month-to-month basis in the ACT. And there are many rentals available for up to a six-month period. I would think that that is something that people in that circumstance could consider. Thus they would not ever be liable for a tax on a vacant property: it would not be vacant, because it would be reducing homelessness in the ACT.
I am very pleased to be supporting this bill today. It is a win for housing affordability. By itself, it is not enough to solve the problem, but every extra home brought into the rental market in the ACT will help in what is a very tight market.
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