QUESTION: Vacant residential property tax
May 17th, 2018
On the 17th of May 2018, Mark asked the Treasurer questions about vacant residential property taxes.
The Hon. M.C. PARNELL: It is commonly reported and I think widely accepted that we have a housing affordability crisis in Australia generally, including in South Australia. Obviously, one answer is to build more houses, but another idea is that we could make better use of our existing housing stock. One tool that can be used to help achieve this is what is commonly referred to as a vacancy tax.
When property owners keep their properties vacant they are effectively withdrawing supply of occupiable properties from the market, which has the effect of increasing pressure on prices and rents. Imposing a financial cost on the owners of occupiable residential properties that are vacant for no good reason and for long periods encourages property owners to make their properties available for purchase or rent, and so helps to increase the supply of housing.
The Victorian government introduced a vacant residential property tax that commenced at the start of this year. It is a 1 per cent tax on the capital improved value of the taxable property and it applies to properties in the inner and middle areas of Melbourne that are unoccupied for more than six months within a calendar year.
My question is: will the Treasurer consider a tax on residential properties that are vacant for long periods in order to free up unused housing for rental or purchase?
The Hon. R.I. LUCAS (Treasurer): I am happy to say that I have considered it and rejected it, and I do not say that flippantly as having considered it since the honourable member just raised it. The issue has been raised over recent months, in particular as a result of the Victorian government decision, and there are a lot of people in the community—generally left of centre politics, the Labor Party or the Greens—who are quite attracted to the notion of introducing new taxes into South Australia.
We were elected, unashamedly, on a platform of reducing the tax burden on struggling South Australian families and struggling South Australian businesses. We were elected on a platform, unashamedly, of reducing overall tax levels. We were elected on a platform, unashamedly, of saying no new taxes. I am sure the honourable member and others seeking to hold this government to its myriad of policy commitments made before the election—one of which was no new taxes—would not want the Marshall Liberal government to break a clear, explicit and unequivocal commitment to no new taxes by going down the path of introducing a vacancy tax.
I am sure the honourable member, or indeed members of the opposition, can come up with lots of bright ideas for new taxes; it is in their DNA after 16 years. Anything that moved they sought to tax. This parliament and, in particular, this chamber proudly rejected at least two of those new notions of taxes in South Australia. There will not be a proposal for new taxes such as the vacancy tax under a Marshall Liberal government.
The Hon. M.C. PARNELL: Supplementary question: if the vacancy tax idea has been rejected, what other levers does the Treasurer believe the government has to free up vacant residential properties, some of which we note are vacant for years and years?
The Hon. R.I. LUCAS (Treasurer): That is an issue I would need to discuss with my colleagues responsible for both land supply and housing policy. I would not put myself out there as the fount of all wisdom in relation to housing policy under the Marshall Liberal government. I have many colleagues who have portfolio responsibilities in that particular area. I am sure it will be an issue that a Marshall Liberal government will need to address across a number of portfolio areas. There isn't just, if I can put the point of view, the simple tax lever that could or should be used in relation to housing affordability.
There are a range of other issues. I am not sure whether the honourable member has served with me on previous Legislative Council committees when we have taken evidence on housing supply in particular and the impact that restrictions on housing supply have on housing and land costs in capital cities in particular. I am struggling to remember which one it was, but I suspect it was the Statutory Authorities Review Committee when it actually did an inquiry into the Land Management Corporation, one of the predecessor organisations to Renewal SA, which was the land bank for former governments, both Labor and Liberal. That committee took evidence from a number of national and international experts who argued the case that land supply was the major determinant on housing affordability in capital cities in particular.
I have to say there were also other experts who disagreed with that particular point of view and I suspect that, given the furious nodding of the honourable member, he might be in that particular camp or category. So there are a number of other levers, to use the honourable member's word, which are open to governments. Some of those levers are not within my responsibility as the Treasurer. Certainly it will be an issue that my colleagues with those portfolio responsibilities and I, as part of a new cabinet, would need to have a look at in terms of housing affordability.
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