Could a tax against empty homes help end Australia's housing crisis?
Could a tax against empty homes help end Australia's housing crisis?
In 2018, Canada's British Columbia introduced a tax against vacant homes. Three years later, more than 20,000 rentals were back on the market.
My first instinct is "yes" but then I thought about it and I think it's just going to exacerbate the short-stay problem unless combined with other measures.
I quite liked Wales' approach of taxing second homes significantly more.
A large part of Wales' housing issue comes from English retirees buying up holiday homes. To the point people were accusing the government of discriminating against English people for the tax against properties that aren't main residences.
Easy fix then, set the criteria for not getting taxed to a formal leasing agreement.
There would have to be a minimum term for it to qualify. Otherwise, that could be worked around with a “lease” with a term of one day.
True, but the simple fact of making it a lease with all the legal protection and obligations inherent under tenancy laws would absolutely blow a hole in AirBnB's arse.
Remove negative gearing and the capital gains tax concessions then let's talk other measures.
This.
This is the easiest to administrate and provides the biggest benefit. This is the low hanging fruit.
However, after Labors bloodbath when taking it to the election in... 2017 (?) it's a political non-starter.
It's one of a long list of possible measures that the government could take but won't.
Our government is riddled with landlords. Why would they vote for policies that don’t benefit them.
The title has been edited on the ABC, and the new title is a pretty perfect summary of what I think almost anyone would have intuitively understood:
could improve Australia's housing crisis but isn't the only solution
Just tax land...
A flat land tax is a bit rough. Take some 80-year-old pensioner living in a simple house in suburbs. They've lived there for 60 years, only that suburb is now gentrified and a blanket 1% tax on the house is now a $10k/year tax bill they need to come up with (Just making up example of 1% of $1 Million property) just to stay in their own home.
This is a tough problem to figure out. I'm glad it isn't my job. Whatever the solution is, I'm sure it's more complicated that just blanket-taxing land. There'd need to be some exemptions to address this (which wouldn't be that uncommon) and other scenarios I'm too dumb to think of. And whatever exemptions are applied, would naturally lead to people exploiting them as loopholes.
I think options to defer payment until sale of the house for people with low incomes would be worthwhile, but considering the massive benefit we give to pensioners who own their own home I don't think it is unreasonable for some of that to be repaid from the sale of the house. If that same pensioner held a similar value of assets in any other form we would expect them to be fully self-funded and they would not see a cent of pension.
The people at prosper have put some thought into this. https://www.prosper.org.au/campaigns/stamp-duty-to-land-tax/ there scheme allows the elderly to defer the tax until sale which prevents them from being forced to sale but still incentivises it.
Yep. Can't dodge it, encourages productive use. The only thing is it might push more properties towards airbnb unless you tax that more to make it less profitable.
Outside of holiday towns I don't think AirBNB is actually an issue it's such a small percentage of properties that it's really just marginal. Arguably they get a small subsidy for paying residential rates but most the time it's an apartment that gets the minimum rate so effectively a hotel is paying less.
In holiday towns it's similar but arguably they cause more dramatic spikes in rent but overall it should be similar. Tourists are also generating a lot of revenue and jobs so would you rather low rent but no jobs or higher rent but a competitive job market?
We just should stop shovelling people into cities. Lots of people can work remotely and one who can't will follow one who can. Just tax companies for having office unless they do production. Yeh, yes it will crash prices in CBD, so not going to happen.
Cities are still good even if you don't need to commute into work. Having higher density means people can walk or cycle to visit friends, or when going to social and sporting clubs. They mean you can get to the shops much more easily, and are more likely to have access to a wide variety of niche stores.
They're better for the environment because they reduce dependency on cars, and reducing the need to drive everywhere is excellent for children and teens who can gain a greater degree of independence when they don't have to be driven everywhere by a parent. And good for health because more passive exercise is amazing as a substitute for driving everywhere, as well as because of the reduction in pollutants in the local air caused by driving.
In short, suggesting people should spread out ad infinitum might be fine when you just look at it in terms of "home" and "work" travel, but in a much broader sense there are huge advantages to keeping people located together.
While I don’t disagree that cities give better access and is better for the environment, I do disagree about the independence for young people. In the city, it is not seen as safe for a young person, like under 10, to walk to their friends house in the same suburb. In the country that would be perfectly normal. I do agree, car transport becomes a necessity for events and meet ups that are further afield. However, that’s also the case in the city. Just no for every event due to better public transport, but our public transport systems are not all covering.
Honesty I do not believe that many would prefer to live in units where others walking on you head than in a house. Yes you can be forced to live in such condition because unit it is all you can afford while having reasonable commute. Remove that requirements and people will spread. Historically cities were build for mutual protection after that to concentrate work force. It is no longer relevant, they have nothing to offer in modern world. Yes it is cheaper to confine population in cities, but tent camps are even cheaper. to run Cities are not something we should use in the future.
We tried that in Canada, housing in small towns just shot up to super expensive as well, and it's now just expensive everywhere.
In this case only answer is more houses. And lowering building code, so building for new house does not mean you have to pay mortgage for next 25 years.
It's already everywhere. Places like Wollongong and Newcastle have the same housing issues as Sydney. Sometimes even worse. And even further out to places like in the Maitland and Cessnock council areas people can't afford rent anymore. And every new vacancy has hundreds of people showing up.
In fact local people are suffering more as cashed up Sydneysiders are swooping in paying the "cheap" rents which are already double what they were pre covid.
Minimum density to housing.
1km from minor train station, light rail or BRT should have a building height of 50m+ to 100m
Major stations with express services minimum 100m to 150m
Metro 150m+
Problem 2 is immigration just comes to NSW and Victoria. Have different citizenship requirements depending on where someone is living.
For example something like 10 years minimum for citizenship if you've worked or lived in Sydney or Melbourne but 5 years if you haven't.
For example Spain has different citizenship requirements depending on where you're born. If you're born in Portugal, Andorra or any of their ex colonies it's only 2 years residence to get citizenship for everyone else it's 10 years.
We could apply the same principle - citizenship takes 5 times longer if you reside or have resided in Sydney or Melbourne. This will reduce the immigration demand on these two cities.
More density is great, but you're taking it to some rather ridiculous extremes. 1 km is a really large radius.
Looking at Wooloowin Station in Brisbane, 1 km takes you to the opposite side of Lutwyche Rd in the west and Sandgate Rd in the east, which are areas that are very obviously not connected in terms of locality to Wooloowin Station.
The guideline for good accessibility is usually a 400 m walk to public transportation, and I think that means it's also a good guideline for where the increased density should be located around stations. (It's a bit borderline on account of the walking distance being the indirect route taken on the ground, while the radius is a simple "as the crow flies" distance, but it's a decent guideline anyway.)
50 m tall is, according to this report from the city of Victoria in Canada, 17 storeys. That would make 100 34 storeys and 150 m+ a minimum of 51 storeys. That's huge.
But we can achieve much greater density on the whole without going to such extremes. So-called "gentle density".
Council’s current approach has been “avoid changing anything at all, but when we do change, push for the tallest towers we possibly can get away with”. My policy would be almost the opposite of that. I would make widespread sweeping changes across the entire city, but the scale of those changes would be fairly small. I'm using Brisbane City Council terminology because that's what I'm familiar with, but similar concepts should apply:
I would eliminate all LDR and CR1 zones entirely and replace them with LMR3 and CR2, respectively. LDR allows only single-family separated homes. LMR2 allows 2–3 storey apartments and townhouses, as well as granny flats and duplexes, while not outlawing single-family separated homes. Then, I would make everywhere within a 400 m radius of a train station HDR1 (with the caveat that my version of HDR1 would still permit townhouses and duplexes like the current LDMR and MDR do, but which current HDR does not, while still not permitting single-family separated homes). Between 400 and 1000 m of a train station would be MDR. MDR is 5 storeys, HDR1 is 8 storeys. HDR2 (15 storeys) could be used for major important train stations, but really I don't know if I want to see anything more than 8 storeys further out from the CBD than about 5 km.
But that first step is really the most important. You could get a doubling or more of available density just by removing all the low density and replacing it with a gentle sort of medium density, with the higher density areas sort of like the spice on top.
Its definitely not an extreme it's definately already happening just at a slow pace for the housing we need. Maybe not in Brisbane but there's precedence.
Parramatta is about 23km from Sydney and will have 8 150m+ , with the tallest at maximum height 230m. Apparently that 230m was forcibly scaled down due to airport height restrictions.
Liverpool, a smaller suburb has a few lined up that is over 100m, including 2 over 1km away at the edge of the suburb. Rhodes, Macquarie Park, Chatswood, St Leonards are new suburbs that now have skyscrapers including residential skyscrapers where it didn't have even 5 years ago.
If you look here there's significant development quite a distance from the city especially if you look at the upcoming pipeline of buildings
https://en.m.wikipedia.org/wiki/List_of_tallest_buildings_in_Sydney
And the latest news although not residential, still a step in the right direction - this is nowhere near the CBD by the way.
https://www.sydneymetro.info/article/contract-awarded-develop-norwest-metro-station-site
We definitely need more density. Sydney's new metro network is running at less than half capacity because it runs through detached housing. With a capability of 30 trains per hour it's a waste without the density I mentioned. It is currently operating at only 15 tph during peak.
In terms of planning the government here has recently switched from determining density based on how far you are from the city which is common elsewhere in Australia to density tied to amenities. Many near the station are now zoned R3/R4 which is medium to high density despite being an hour from Sydney. This is a good solution it doesn't preclude anyone from owning detached housing, but don't expect good public transport on tour doorstep.
But yes I do realise this is unique to Sydney, we've had local clusters so each council has its own commercial hub. We have a non radial transport network so travelling locally is alot easier. And we run express trains from first to last including public holidays and weekends. So some groundwork is already done to support a denser population.
Too little too late.
I swear I've seen this exact post before. Might be because the answer is a pretty clear yes; if combined with killing AirBnBs. If only this changes, then the problem won't actually be solved.
It should be based on bedrooms.
A four bedroom house should have a minimum three people living there as their principle place of residence. The address on their drivers license, electoral roll, school encirclement, etc. If you have less people, you should pay... I dunno, $40k per year in tax?
The government can use that $40k per house in tax revenue to buy all the homes people are suddenly going to want to sell, and put them on the rental market. In some parts of Europe half of all rentals are owned by the government. It's a system that works well. It also makes town planning easier - often homes need to be demolished in order to build infrastructure for example. The government can do that if it owns a suitable residence with a lease that's ending soon.
Nah, i don't like this idea at all.
IMO it violates the age old principle of "quiet enjoyment". Whether you own or rent, you should be able to determine what happens in your own home, provided that it doesn't impose on anyone else's quiet enjoyment of their premises, nor the personal liberties of your co-occupants.
Imagine whatever agency knocking on your door to confirm that the registered occupants do actually reside there. No thanks.
Doesn't this encourage knocking down walls, making bigger bedrooms, reclassifying rooms as non-bedroom, and knockdown rebuilds.
Bold! I like it. I worry it would fall into arguments of what is a bedroom and what is a study/wfh space, etc. Also, what if someone can't find someone to fill their extra bedroom? A 40k tax would force people to live with people they don't feel safe around.