As for the national tax, 340 properties were levied across Australia in the 2019-to-2020 fiscal year, netting the country a grand total of A$3.7 million. That equates to an average of A$10,882 per property, which on the banding system used suggests the typical property caught under the tax is valued toward the A$2 million mark. So even if those homes were listed on the open market, it’s unlikely struggling renters could afford them.
For now, Melbourne has suspended its tax for the duration of the pandemic and at a national level, the Australian Taxation Office said an exemption is available for those prevented from occupying their properties for the required 183 days.
Moral Optics
In Los Angeles, where a vacancy tax is on the table for residents to vote on next year, there are “more empty units than we have unhoused members of our community,” said Joe Donlin, the director of research and policy advocacy for Los Angeles-based Strategic Actions for a Just Economy.
The nonprofit published a report last year arguing the city should implement its own vacant-homes tax, citing Vancouver as a place to emulate. It argued that while the tax itself wouldn’t be enough to turn the situation around, noting that vacancy rates are higher for more expensive properties, such legislation would send an important message.
“There’s a great opportunity to affect the behavior of speculators that are keeping units vacant, and generate revenue to develop the kinds of affordable housing that is necessary to house all the members of our community,” Donlin said.
For some cities, it’s not just about the redistribution of housing or tax revenue, but the political and moral optics of not having more homes than you need while others struggle to even hold onto one.
“These taxes are more about property-market integrity and domestic political issues like housing affordability and availability rather than being an efficient revenue base,” said James McIntyre, a Sydney-based economist for Bloomberg Intelligence. “What really drives housing affordability are things like interest rates, planning restrictions and overall tax settings.”
This year, Vancouver raised its vacancy tax to 3% of the property’s assessed value.
“By tripling the tax from 1% to 3% since the tax launched,” Vancouver Mayor Kennedy Stewart said as he announced the hike, “we're sending an even stronger message that homes are for people, not speculation.”
—With assistance from Ari Altstedter.
This article was provided by Bloomberg News.