If property owners don’t want to rent then tax them. Maori Authority calls for a Ghost Tax
If property owners don’t want to rent then its time to tax them. Maori Authority calls for a Ghost Tax
A tax ln what are being described as empty “Ghost Houses” in New Zealand has been called a must as New Zealand continues to grapple with the housing crisis. The Chair of the National Maori Authority, Matthew Tukaki, has said that there are an estimated 39,000 unoccupied dwellings in the Auckland area alone according to CENSUS data and that has increases by 18% in the last five years. Amongst those under huge pressure for affordable accommodation are Maori and Pacific whanau.
“Auckland with 39,000 homes unoccupied, Tauranga has an estimated 5,000 and Christchurch with 13,000 – we are dealing with a situation where people are buying and land banking not with the return being rental income but simply on the capital value of their home – and to be frank given we are in a housing crisis at the moment the only thing that makes sense is to motivate them to rent.” Tukaki has said
“We have a massive rental affordability issue at the moment as well as a lack of available stock that is also affordable – that is why we want to see a “Ghost Tax” implemented without delay – if that motivates some investors to release property to become rentals into the market then that’s great and if people simply want to land bank and sit on the value of the property then they can pay a tax and we can use income raised from that tax to invest into social housing and housing development builds” Tukaki said
“In 2021 the State of Victoria introduced a new tax called the “Vacant Residential Land Tax” and is targeted on inner Melbourne City where there has also been significant housing pressure. If you don’t want to rent your property out then you pay 1% of the value of the property per annum therefore making the cost to be $5,000 per annum on a $500,000 property. If we used the same concept to target the 39,000 homes in Auckland (if they all had a value of $500,000) then the tax would raise around $195 million. Now keep in mind these are houses that are currently unoccupied and even if we deducted a percentage to recognise the number would be lower this would still be a huge motivator to either increase supply or gain income.” Tukaki said
“Lets argue for a moment we did raise $195 million in Auckland alone off a Ghost Tax for vacant properties and churned that into developing more social housing builds and the average cost for building a home was 500 – we would have the revenue to build hundreds of new homes for low income whanau and also give priority home ownership to some of our critical workers, similar to how they do it in New South Wales” Tukaki said
“And worse case scenario the Ghost Tax leads to more people entering the vacant property into the rental market – if we can increase supply we could also see greater competition between landlords which itself could have a stabilising force on rental increases and even see some postcodes fall back” Tukaki said
“Either way it has become a running joke that people are stepping into the market and simply purchasing the house for a rainy day investment to build capital value – and that includes whether or not we are doing enough to monitor overseas investment coming in. Its one thing to approve the overseas purchase of the property but little or no monitoring goes into whether or not its being occupied.” Tukaki said
Tukaki has written to the Finance Minister outlining his concerns and the framework of a Ghost Tax.