Catherine comments on a Vacancy Tax in the AFR


Catherine discusses the Vacancy tax - it's not useful to the long term solution of increasing housing supply


A tax on "vacant housing" may increase the supply of rental homes in the short term, but does not work as a long-term solution to addressing housing supply, experts say.

Foreigners buying properties and leaving them empty is a "big issue" that's "got my attention", Treasurer Scott Morrison said on Monday.

"They [taxes] have some impact but they are expensive to administer, especially the exemptions for people with particular issues (such as working away from home)," University of Sydney Urban and Regional Planning and Policy chairman Professor Peter Phibbs said.

"Taxes relative to the very rich, are very small. Investors who can leave their properties vacant will continue to do so.
"The impact of [a vacancy tax] is marginal....especially with investors who don't think about yields but about large capital gains."
Data around empty dwellings are "rubbery". Last year, based on census data, which is refreshed every five years, UNSW's City Futures Research Centre's Bill Randolph and Laurence Troy estimated there were about 100,000 average dwellings – with two bedrooms – vacant in Sydney. These did not include holiday homes.

Non-government organisation Prosper Australia, which calculated Melbourne's vacant dwellings annually based on water usage in a report called Speculative Vacancies, said about 4.8 per cent of Melbourne's total housing stock or just over 80,000 appeared to be vacant in 2014. That was the last update.

Both groups agreed there were significant difficulties in accurately quantifying the numbers such as "illegal" Airbnb subletting, census "numeration issues" and unit block shared water usage.

Both Mr Randolph and Prosper's Catherine Cashmore said there were better techniques such as the use of electricity meters - which Mr Morrison could authorise - but the cost of administration could outweigh the benefits of having only a few more dwellings released into the market.
"I am not sure it will solve the affordability issue," Ms Cashmore said.

"With implementation, how will you draw the line? Are you going to audit a handful of houses...for example with fly in, fly out workers, people staying at hospitals, there are loopholes."

Canada and the United Kingdom both impose the tax but there is no evidence they work to increase supply of rental homes in the long term.

"The UK is interesting, not so much the quantitative tax but the pressure on owners to think twice about leaving the properties vacant," Mr Randolph said.
He suggested a renewed focus at improving the planning process so that more developments can flow and reduce the pressure on prices, while Ms Cashmore advocated a broad-based tax like land tax.

"A vacancy tax does not deal with the vacant land held on by developers but unfortunately it's politically unpopular to let land prices drop," she said.


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Catherine Cashmore


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Catherine Cashmore has been working in the Australian real estate market for over 14 years. As a buyer advocate, she has assisted hundreds of Australian home buyers and investors to secure quality real estate for the best possible price. Originally from the UK, and having lived in the US, Catherine is a seasoned traveller who has extensive experience across a range of international real estate markets for those interested in property investment overseas.. 

As President of Australia's oldest economics organisation, Prosper Australia, Catherine is a regular and highly respected media commentator and often called upon to give guest lectures to university students (including RMIT and Sydney University) on how tax policy affects real estate, the design of cities and the economy.

She is editor of Port Philip Publishing’s 'Cycles, Trends, & Forecasts' – a publication that teaches real estate investors about the land cycle and its effects on the economy. She is author of ‘Speculative Vacancies’, the only study in the world that analyses long term vacant housing based on water usage data (Melbourne focused). As such Catherine has an in depth knowledge of the Australian real estate market, few can rival.

You can contact Catherine directly on 0458 143 089 or at



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