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ACT Greens push government to investigate extending land tax to vacant rental properties

ACT Greens push government to investigate extending land tax to vacant rental properties

31 March 2017 Kirsten Lawson


The Labor government has agreed to investigate a "vacancy tax" or an extension of land tax to vacant investment properties, after the Greens' Caroline Le Couteur called for action on Wednesday.

Ms Le Couteur wants land tax to extended to all properties unless they are owner-occupied, charitable or farming properties, bringing the ACT into line with the states.

In Canberra, rented homes already attract land tax, but vacant homes are exempt. For a $400,000 property (unimproved value), land tax is about $4000.

"It doesn't make sense that you have to pay the government if you rent your house out, but if you leave it empty you don't pay," Ms Le Couteur said, suggesting the system might have been a historical anomaly because of the number of Canberrans posted overseas and leaving their homes empty.

Under Ms Le Couteur's proposal, such people's homes would attract land tax, which would encourage them to rent out their homes while they were away.

"I would argue if you're overseas for two or three years, rent your house out and pay your land tax as a landlord," she said.

Unions ACT secretary Alex White called for a vacancy tax in a budget submission, saying many Canberrans were struggling to rent. Mr White said the charge should apply to rental properties left vacant for more than 18 months, encouraging property owners who "hoard" an untenanted home to put the property on the market. 

"At a time when rental affordability is a major issue affecting thousands of working people in Canberra, it is unacceptable that there are over 2500 houses left empty by investors and developers," he said.

Ms Le Couteur put a motion to the ACT parliament on Wednesday. The Liberals supported a review; Labor amended her motion, agreeing to investigate how many properties are left vacant, and to consider "the effectiveness of a vacancy tax, land tax arrangements or similar measures". It has agreed to report back in September.

Ms Le Couteur said figures from Victoria suggested as many as one-quarter of apartments in some buildings had never been rented. An estimated 80,000 Victorian homes and 90,000 NSW were vacant, she said, with Victoria announcing a vacancy tax of 1 per cent of a property's value.

Ms Le Couteur said while the problem was unlikely to be  anywhere near as bad in the ACT, "even if it is only 1 or 2 per cent this will make a difference to housing affordability."

"This is to encourage the owners of the houses that are not occupied by anybody to either put them on the rental market or think, I don't want to keep on owning this asset," she said.

She acknowledged there were complications, such as when properties were vacant for renovations, in deceased estates, where families found it difficult to finalise decisions about the family home, and in cases where people were posted overseas, perhaps short term but heir posting was extended.

Housing affordability was one of the biggest social and economic issues that Australia faced, she said.

"For too long the taxation system has benefited investors over home owners, contributing to housing stress for many Canberrans," she said.

The "unfair system" would continue until the federal government abolished negative gearing and the capital gains tax discount, but in the meantime, the ACT could make its own reforms.

Housing Minister Yvette Berry said the Sydney and Melbourne markets had seen aggressive investment by property speculators and were different markets to Canberra. 

She also pointed to the complexity of measuring the number of vacant properties, and said any scheme in Canberra must be well informed and consider the impacts.



Date: 22, March 2017