Contributed by Adam Carlton
Twelve organisations have come together in Tasmania to call for the imposition of a levy on owners of homes that they keep vacant. Housing affordability is an ongoing and worsening problem. A shortage of accessible homes is pushing up the cost for buyers and renters.
The Tasmanian government has promised to build or acquire 10,000 new affordable homes by 2032 to address the problem. While this is positive, in that it will provide part of the answer by making places available and pressuring the cost of housing downwards, it is not the whole answer. The problem is the assumption that the problem is only a shortage of buildings.
This ignores that a big part of the problem is that owners of multiple properties are rewarded for keeping them vacant. Open these up and the shortage would mostly melt away. Take the reward away and the incentive to leave the properties vacant will disappear.
Going down this road does not have to threaten the family holiday home. It can be targeted against corporate ownership of large portfolios.
Ultimately, a solution must involve the ending of negative gearing. This is the government subsidising unrented properties. The trouble with this is that be profitable, especially for owners of many properties to keep them empty. The money keeps coming in and the maintenance costs are way down. This is the case in Tasmania. It is an Australia wide problem.
A lesser problem is the ability to claim offsets on the capital gains tax on the sale of a property when extended to the corporate investor.
These barriers to freeing up existing potential homes can only be removed over a period of time, step by step, to avoid creating instability in the market. The introduction of a levy can help bridge the gap. Melbourne already has such a levy., and it hasn’t made the sky fall in. A levy can create incentive to find tenants and provides the state government funds for new housing.
The organisations that have called for the levy in Tasmania are Anglicare, Community Legal Centres Tasmania, the Council on the Ageing, Hobartians Facing Homelessness, JusTas, Shelter Tasmania, the Tasmanian Council of Social Service, Tasmanian University Student Association, Tenants’ Union of Tasmania, Women’s Legal Service, Youth Network of Tasmania and the Tasmanian Aboriginal Centre.
They have written a joint letter to Premier Jeremy Rockliff, calling on him to address the housing crisis in the short term.
Both the Coalition and Labor have said they are against it, claiming that a levy will not solve the housing affordability crisis. Of course not. But it can be part of the package. And the idea has already been raised in other parts of Australia, it just might be about to become more popular.