Could having an empty home leave you with empty pocket? Possibly. It depends on where your empty house is located, and the rules surrounding it could soon change in any case.
We’re talking about the ‘empty home tax’ – a hotly debated political topic right now.
In Victoria, what is officially known as the Vacant Residential Land Tax, was introduced in 2018.
The tax applies to empty residential properties in the inner and middle suburbs of Melbourne that have been vacant for six months. It is charged at one per cent of the total capital improved value (CIV) of taxable land. That is, if a vacant home has a CIV of $500,000, the tax will be $5000.
Basically, if your eligible residential property was vacant for more than six months in the preceding calendar year, you could be subject to Vacant Residential Land Tax.
The government’s official justification for the tax is that it will “help address the lack of housing supply in Victoria”.
Not everyone buys that line, but the empty home tax remains, and the state government is now set to expand it.
New Victorian Premier Jacinta Allen just introduced legislation to expand the tax to include properties throughout Victoria. The one per cent annual tax of one per cent of the capital improved value (CIV) of taxable land will not change but, from January 2025, will apply to houses across the entire state.
And it will not be stopping there. From 2026, the tax will even apply to blocks of land in Melbourne waiting to be developed but unimproved for more than five years.
Will NSW and the other states adopt an empty home tax?
Of course the housing shortage crisis is not unique to Victoria, so do other states and territories have similar plans?
In the most populous state, the answer to that question is, so far, no. Chris Minns, NSW Labor premier ruled out adopting the tax. Without directly criticising Victoria’s empty home tax strategy, Mr Minns outlined his alternative.
“You can do many things when it comes to housing supply. We’re going to focus on bringing on more supply,” he said.
Further north, Queensland’s Greens MP Amy MacMahon introduced legislation that would charge vacant property owners a five per cent tax. She said the bill would bring thousands of vacant properties into Queensland’s rental market, and lower rent and property prices.
Ms MacMahon tabled the bill for Queensland’s own empty home tax last October, but it was ‘dead in the water’ on day one. Queensland’s speaker ruled against it on a technicality. The Bill sought to increase or impose revenue, the speaker said. It breached the fundamental constitutional convention of the financial imperative of the Crown. It was therefore out of order and was discharged from the Notice Paper.
In the other states, no attempt to introduce similar legislation has been made – yet. But as Australia’s housing shortage crisis deepens, governments – state and federal – are under pressure to act.
For now, the empty home tax remains a Victorian peculiarity. How much longer it will stay so remains to be seen.
What do you think of the idea of an empty home tax? Is there a better way to deal with the housing crisis? Let us know via the comments section below.
Also read: Housing insecurity hurting increasing number of over-55s
If a tax is to be applied to vacant land, State governments need to look at themselves. In my nearest town there are vacant blocks of State land and empty State owned buildings left right and centre. An argument between the local council and State government has gone on for years about the State’s desire to build housing on a prime spot 90% of the locals want preserved for recreation while larger more suitable blocks remain vacant.
On the vacancy tax I would reluctantly pay it. I have had to work overseas for years renting out our home and a few investment properties only for all of them to be abused by tenants in various ways. I would never do this again and I know of many in the same situation who wouldn’t either. The one million empty homes tells a story but nobody is asking why. Many real estate letting agents act like total amateurs too.
There is far more to this housing crisis than a shortage of property.
And it won’t improve the rental situation. Show us the data to back this ridiculous claim. Just another greedy tax in disguise. Home owners should have the right to do whatever hey want with a property that they have purchased with money that’s already been taxed.
The rental situation has been caused by governments doing away with public housing projects over many many years and now they are blaming and punishing property owners for a problem of their doing.
Why does the Moron-on-the-Street put up with the crap extolled by pompous, self-justifying ‘authorities’?? The ‘housing crisis’ has been manufactured deliberately by these same ‘authorities’ (governments/councils/etc) and is EASILY fixable.
Consider: The Blackfellas turned up 60,000 years ago, leaned a slab of bark and called it ‘home’. Much later a bunch of Englishmen led by Capt. Cook arrived and started building whatever shacks they needed. Later still returned soldiers claimed 640 acres and built whatever size and style of house they wanted. Still later, while Australia’s population was 7 million, Bob Menzies imported a further FOUR MILLION post-war refugee migrants; none of who had a penny and most of whom couldn’t even speak English. BUT I, as one of them, don’t know of a single one of them who weren’t in their own home in under five years. Mostly self-built, without ‘qualifications’ and often without ‘authority’ approval. I personally, over the years, have built four great houses with ALL modcons: the most expensive of which cost a total of $8500. On EVERY ONE OF THE ABOVE OCCASIONS people housed themselves, and HOMELESSNESS WAS NEVER AN ISSUE. The ONLY reason this approach no longer works, and people are living under bushes or in cars is because of tampering/interference by the ‘authorities’: Rules/Regulations/approvals/documentation/fees&charges and all the other bullshit. And the same ‘authorities’ have virtually outlawed ‘owner-building’, and in doing so have stopped a practice as old as human life on this planet, and one which has PROVEN ITSELF since time began. The only question is: WHY DO PEOPLE PUT UP WITH SUCH CRAP FROM bureaucratic MONGRELS WHO WON’T GO OUT AND GET AN ACTUAL JOB. History provides ample solutions to this problem; I prefer the one called ‘The French Revolution’. THis once-great country will always struggle until the self-named ‘authorities’ are eradicated. (Assuming we can get an overpriced permit for a guillutine!. )
PS. Never mind the haggling over the form and amount of taxes! YTF do all you morons pay taxes at all? At least Ned Kelly had the decency to show you his gun. Ever wonder what would happen if EVERYBODY just refused to pay taxes-on-demand? (or refused to feed the self-important bastards who feed off them?? I’m looking at going somewhere safer, sounder and saner than the Long-Drop this once-great country has become. North Korea is looking better all the time!
Does this tax apply to Department of Housing owned properties that have been vacant for well over 2 years??? There are several in the suburb I live in, in Melbourne’s east.
Oops! If said tax DID apply to government-owned properties it’s STILL the moron on the street that woulkd be footing the bill. I repeat: all these distractions aside WHY TF do people tolerate these petty dictatorships? If a thug on the street tried to rob you you’d be entitled to kill him. Why doen’t the same rule apply to ‘them’? (Oh wait! I forgot! THEY’RE the ones that MAKE the ruels; because the moron on the street elects them.