One in ten houses in the inner west is empty and the council wants it taxed

Figures from the 2021 census show there were nearly 300,000 unoccupied homes across NSW – 9.9 per cent of private homes in Sydney’s inner west were vacant.

“A similar vacancy tax could be successful if applied in areas of Sydney where vacancy rates and affordability pressures are greatest,” read the agenda for the Inner West Council meeting. “It has the potential to increase the supply of rental housing.”

Council documents also say the money raised by the tax could help fund new social and affordable housing.

New South Wales Housing Minister Rose Jackson, while in opposition last year, said it was time to have a “proper conversation” about vacant homes.

“It’s not the be-all and end-all of solving the catastrophic housing crisis that we have, but it’s an important part of it, particularly in regional communities and on the Central Coast,” she said.

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However, a spokeswoman for the minister said the New South Wales government was not “actively considering” a vacancy tax.

Hal Pawson, professor of housing research and policy at the University of NSW, cautiously advocated a vacancy tax on “speculatively owned or – in my opinion – second, third or fourth homes”.

Pawson said taxing vacant houses is a good idea for countries that don’t have a significant property tax on home ownership, such as Australia.

“It’s easy to propose empty property taxes, but it’s harder to make them legally watertight and politically acceptable,” he said.

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However, Pawson said a 5 percent tax on vacant homes in Vancouver has raised millions of dollars and “brought back” more than 4,000 homes to the market.

The Tenants’ Association of NSW also supports incentives to return properties to residence, chief executive Leo Patterson-Ross said.

“One of the most effective ways to do this is through a broad property tax,” he said. “We believe it is a fair and efficient form of taxation that discourages property-owning behaviors such as land banking and property vacancy.”

Tim McKibbin, chief executive of the Real Estate Institute of NSW, said taxing vacant homes is attractive on the surface but would interfere with property rights and investment decisions.

“If communities in general really want to help with housing, then the speed of processing development applications is the biggest benefit to their efforts,” he said.

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Justin Scaccy

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