Non-users may have to pay for vacant properties

Most people have come to accept the user pays philosophy, be it toll roads to taxes on so called luxury goods.

But how do you feel about paying extra council rates for having a property vacant for extended periods, this is a plan that the Federation of Housing Associations are recommending to address housing affordability.

According to their CEO, Wendy Hayhurst, there are around 120,000 properties in the Greater Sydney Region which fit the above criteria.

Read more here: http://www.smh.com.au/nsw/vacant-sydney-homes-in-sights-for-housing-tax-plan-20150814-gizem2

 

Is this aimed at everyone or targeting foreign investors that leave properties empty?

 

Hmm, that's an interesting idea.
I wouldn't like it if it happened to myself, but I guess it has it's merits.
What about little holiday houses?

 

Non income producing properties exempted maybe..

 

Kinda absurd from a enforcement view.

Automatic water timers. Automatic electricity switches. Now your house uses water and power as though someone was living there. Can't be identified through either record.

Then what? Targeting houses empty on census night?

 

they do this with rates in England....

 

Anyone that leaves properties empty for extended times, the actual time is to be determined.

 

Potentially holiday homes could get hit if this were to go ahead.

 

I wonder how some people afford to hold holiday homes. Maybe they bought them when they were really cheap. Maybe they inherited them.
This plus insurance plus rates and no rent would make it more difficult to hold onto and keep vacant.

 

It could really put the brakes on that sector of the market.

A lot of folks buy holiday homes, and they are usually buying someone elses' holiday home, so if all the new buyers pull out due to the extra charges looming, this leaves the sellers with no buyers.

Cheap homes for the FHB's...with a massive commute.

 

If you've got the money you don't worry about it.

 

I think its fair enough from the point of view that council/government/utilities, etc make planning and investment decisions around housing. Leaving it empty is inefficient and so there's probably some merit for being penalised.
Also if the place is to remain uninhabited for a long duration I'd be a fan of cutting and capping the services away. Nothing worse than having a fire or some sort of other safety issue inside a place that is not even being used.

 

I wouldn't think the charges would be so high as to have that much of an effect. Could be wrong.

 

I don't work in the real estate industry but from reading forums and media etc. there seems to be this perception that investors (particularly foreigners) are purchasing houses and just leaving them vacant instead of renting them out. If this is the case it’s choking supply so it’s logical for there to be some market incentives for the owners to rent the properties. 120,000 properties throughout Greater Sydney are apparently vacant. Population growth in Sydney is currently around 90k per annum while the ABS suggests that each household has an average of 2.7 residents. Therefore, there’s around 3 years of housing supply just laying vacant unutilised. To me it makes a lot more sense for the Government to crack down on vacant properties than release more land supply. Tax the vacant properties and if investors don't want to be taxed with a surcharge they can always rent them out. If they leave them vacant the Government should tax them and set away th money in a trust account to be used for building more public housing.

 

Thats a nice simple easy fix

 

There you go, fixed the FHB crisis!

 

I've got money, I would still worry about it.

 

This would send @Waldo bankrupt pretty quick

 

Interesting idea. I used to keep a property vacant while living overseas (not all the time though), than I have decided to rent it out, which I still bitterly regret. Now it might mean more taxes? It will be hard to prove that it's empty.

 

It's ridiculous, really.

It shouldn't matter what folks do with a house they buy...in my area there are loads of homes which get used maybe one week per year or even less, others every school hols, etc.

My wife did a bit of private nursing work for one of the Saudi families when we lived in L.A. This home was easily worth more than $10m....it was a holiday house, and only ever used when they were in L.A.

Plenty of folks around rich enough to buy a house and leave it vacant for their own use as they wish.

It's like saying to someone who happens to like buying cars, and drives them once in a blue moon; "You are not driving these cars enough; we are going to charge you an extra premium on your rego".