Why an Empty Homes Levy?
Empty home levies have been proven to return houses to the rental market by making it more costly to leave homes vacant without a good reason.
In Vancouver, an annual 3% levy has reduced vacancies by 26%. From 2023, Vancouver will be increasing their levy to 5%.
Our Empty Homes Levy would require an investor to pay 5% of the value of a vacant home, unless they have a good reason for keeing it empty.
What properties will the levy apply to?
Subject to some exemptions, the levy will apply to any property that is fit for residential purposes (or could reasonably be made fit for residential purposes) that is unoccupied for more than 6 months of the year. Doing so would encourage investors to rent out their properties or sell them to someone who will.
It also applies to empty land that reasonably could be used for building residential dwellings. This will help ensure property developers and investors aren’t incentivised to land-bank empty land, or knock-down dwellings to avoid paying this levy. A levy on undeveloped land will also incentivise investors to sell if they don’t plan on developing that area.
Short-term stays such as Airbnbs are not exempt from the levy. Each day a property is let out as short-term accommodation counts as a day that the property is vacant. Therefore, an owner who lets out an entire residential property as a short-term stay for six months or more in a year would have to pay the levy.
What properties won't this levy apply to?
An exemption to the levy would apply to:
- Properties are used for another purpose in good faith and not to avoid this levy. This would include using a property as a retirement village or for use by a community group. This exemption does not apply to short-term private rentals such as AirBnBs.
- Properties that have recently changed owners.
- Properties under construction or renovation for a reasonable period.
- For land providing valuable wildlife habitat.
- Where the owner has died.
- Where the owner is in aged care, in hospital, or in residential care.
How would an Empty Homes Levy be enforced?
Enforcement of the levy utilizes some of the existing features of Queensland's property and tax reporting systems. Vancouver uses a similar model of enforcement for their vacancy levy.
Land and property owners would be given an assessment notice under the Taxation Administration Act 2001. The owner would then have to prove to the Queensland Revenue Office that the land was not vacant, is not residential land, or fell under one of the exemptions during the past financial year. An owner must supply supporting evidence, such as utility bills or rates bills, to prove they are exempt from the Empty Homes Levy.
The Queensland Revenue Office has the right to investigate any declarations, conduct audits, and request further information to verify any exemption claims. If an owner is found non-compliant or if they made a fraudulent declaration, the owner will be required to pay the tax and a penalty.
A finding of non-compliance can be appealed and taken to an independent tribunal.
Won’t this slow down the investment in new housing?
Right now, Queensland’s housing market is broken. There is record investment in property yet a record shortage in housing. This is because most of the money being poured into property goes into existing housing, land value, and paying interest on enormous mortgages.
An Empty Homes Levy will help ensure investment in housing is first and foremost directed towards putting roofs over every Queenslander’s head, not just boosting investment portfolios.
Where else are there similar vacancy levies?
The Victoria Labor government introduced a vacant residential land tax in 2017. Labor Brisbane City councillors also supported a Greens motion in September to impose higher rates on investor-owned residential properties left empty for more than six months.
Several global cities, including Vancouver and Paris, already have taxes on vacant residential property. Other cities and countries, such as Los Angeles, Hong Kong, Barcelona, and Ireland are implementing a range of policies to tackle long-term empty homes, from vacant property taxes to forcing the sale of empty properties.