A Foley Labor government will introduce a tax on properties left vacant for longer than six months as part of its comprehensive plan to tackle housing affordability and help first home buyers get a toehold in the market.
Investor landlords who leave their properties vacant will be slapped with a 1 per cent tax on the capital improved value of their property. For example, if the taxable property has a capital improved value of $500,000, the applicable tax will be $5,000 a year.
The aim of the policy is to encourage landlords to free up properties for rent or sale and increase supply; exemptions could include holiday homes, deceased estates and homes owned by NSW residents who are temporarily overseas.
The policy has already been introduced in Victoria and in the Canadian city of Vancouver.
More than 100,000 homes are currently left vacant across Greater Sydney – a significant number given that 53,000 new homes were built in NSW last year.
The vacant property tax is the latest plank in NSW Labor’s plan to level the playing field for first home buyers.
Last month Leader Luke Foley announced that a government he leads would raise the Foreign Investor Stamp Duty Surcharge from 4 per cent to 7 per cent; as well as double the Land Tax Surcharge from 0.75 per cent to 1.5 per cent. The measure is expected to dampen the pressure foreign investors place on housing prices.
The scale of the problem of overseas investors buying up property was revealed in Office of State Revenue figures which showed that foreign nationals account for 11 per cent of residential property purchases in NSW.
Mr Foley will also reform UrbanGrowth so that its priorities will be to focus on land release and opening up supply for first home buyers. He has also backed Federal Labor’s policy of negative gearing reform.
Quotes attributable to NSW Opposition Leader Luke Foley
“As a father of three children I would want them one day to be able to buy into the Australian dream of home ownership. Sadly at the current rate that is looking increasingly unlikely.
“If elected, Labor will do everything in its power to help local families get a fairer crack of getting into the housing market.
“Unlike this Government which has been all talk and no action, Labor is getting on with the job of coming up with policies that actually tackle housing affordability.”
“A home should be just that – a roof over a family’s head – not just a place to park your money and let it grow.”
Quotes attributable to Jo Haylen, Member for Summer Hill
“People are being locked out of the housing and rental markets while properties remain empty.
"Time and time again, young people in particular talk to me about how hard it is to find somewhere to live in the inner west and this measure will help to raise supply and ease the pressure."
Quotes attributable to Shadow Treasurer Ryan Park
“Luke Foley and I have been saying for months now that we won’t sit by idly and watch young people miss out on the ability to purchase their own home.
“Today’s announcement is the next step in what will be a range of measures that Labor will put in place to address this crisis.”