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Victoria property owners face ...

Victoria property owners face penalty charge if home is empty

Those looking to invest in property in Victoria will have to ensure the property is occupied, or face being landed with a penalty charge. The state government is implementing the policy in a bid to minimise the number of vacant houses in the area. 

The policy will come into effect from the 1st January 2018 and will only be used to target those who leave their properties unoccupied for an 'unreasonable' amount of time. The fine, which will be levied as an extra tax, will be 1%, multiplied by the capital improved value of the property. 

Tim Pallas, the treasurer to the state of Victoria, has said he hopes that he doesn't make any money from the new policy, as its aim is to improve access to housing and not to raise funds. However, intentions aside, the government is set to make millions from the 20,000 empty properties in the metropolitan Melbourne area. 

There are concerns that the policy will penalise those who are not keeping their property empty for financial gain. However, they have stated there will be exceptions – including for those who own holiday homes in the locality.

There have been a string of policy announcements made by the government in Victoria in a bid to tackle the housing crisis. Its primary aim is to help first-time buyers get their foot on the housing ladder. Another one of its key policies is to eradicate stamp duty for first-time buyers for those purchasing a property under $600,000. 

Associate professor Ashton De Silva, a professor from the Centre for Urban Research, has highlighted some of the reasons that people leave the property empty. He said that investors often keep a property empty for 6 to 12 months in order to make a quick profit in the volatile market. 

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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