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Could a tax on empty homes be i...

Could a tax on empty homes be introduced in Australia?

Around one million homes, or 11.2 per cent of Australian properties, are currently sitting at least partially empty, leading to questions about whether a tax should be introduced on vacant homes.

According to data from the 2016 census, there are currently 200,000 more empty properties across the nation than there were ten years ago, indicating that this is something of a growing problem.

Increasingly, both domestic and overseas property investors are purchasing and developing homes in Australia, but these are not being filled - in part due to rising property prices, in part due to misjudged demand - meaning they need to be making sure they can find tenants for their homes, or potentially risk being faced with an extra tax.

Speaking to news provider Xinhua, Professor Hal Pawson of the University of South Wales said: "We need to recognise that housing is not being effectively used and find ways to deal with this and, although tax is a dreaded word, it can be used to address this problem at a national level.

"Overvalued housing takes up a huge amount of resources and compromises the productivity of the economy, which puts a lot of people in debt and reduces their purchasing power."

The prospect of a new tax on unfilled properties is not intended to put investors off doing business in the Australian housing market; instead, it would be to encourage them to think more wisely about their investment decisions to ensure their properties are affordable for tenants and are not going to be a drain on the economy.

Professor Pawson added that as many as one million homes across the country also have three or more empty bedrooms, which could be let out at an affordable price to those looking for a new home, or the owners of the properties or developments could face an extra tax.

Similar measures were introduced in the UK in 2013, dubbed the 'bedroom tax', whereby council house residents with unoccupied bedrooms can lose a percentage of their housing benefits if the rooms remain empty.

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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