Lane Cove Council pushes land tax overhaul to target empty homes, bankroll affordable housing

Empty homes and investment properties would be targeted with increased council rates to tackle Sydney’s rental crisis in a proposal that has sparked fiery debate between councillors with critics labelling the idea as “socialism”.

Empty homes and investment properties would be targeted with increased council rates to tackle Sydney’s rental crisis in a proposal which has sparked fiery debate between councillors, with critics labelling the idea as “socialism”.

Lane Cove Council will write to the state government calling for reforms to the local government rating and NSW land tax systems in a move designed to create incentives for property owners to ensure dwellings are being fully occupied.

The push comes on the back of newly released Census figures which showed 8.3 per cent of homes – or 1391 dwellings – were unoccupied in the council area on Census night last year.

Housing experts say factors for the number of empty homes include laws encouraging investors to leave properties empty, developers sitting on properties for rezoning approvals and homes in transition between sales.

Greens councillor Rochelle Flood said tax reforms could generate funds towards new and affordable housing projects in an area where the cost of the renting is at a premium.

Lane Cove councillor Rochelle Flood says reforms could address housing affordability.

She said the reforms could come in the form of an “empty home levy” which would charge owners of long term unoccupied homes with increased council rates.

“We shouldn’t have a system where people are encouraged to leave properties vacant – particularly when so many families are struggling to find a place to call home,” she said.

More than 1300 homes were empty on Census night in Lane Cove.

“One of the leading concerns is that people are purchasing properties as investments and leaving them empty under tax schemes such as negative gearing that provide incentives for homes to be empty rather than being occupied – it’s above flipping that balance around.

“People are being priced out of the area and that impacts everyone in the community.

“This isn’t about stopping people from using their properties as they wish, it’s about providing incentives to ensure the most number of properties are occupied as possible.”

Cr Flood’s proposal includes writing to the NSW Government for methods to identify homes which are being left empty for long periods of time through measures such as monitoring water usage and electricity connections.

Councillor David Brooks-Horn has opposed the idea.

Councillor Merri Southwood supported the reforms.

Liberal councillor David Brooks-Horn hit out at the proposal, saying the reforms were outside of the remit of local government.

“I fundamentally disagree with telling people what they can and can’t do with their property. It’s got nothing to do with local government,” he said.

“If someone wants to buy a property and let it rot, as long as it’s not hurting the neighbours that should be their right.

“We don't live in a communist society where we’re told what we can and can’t do with our own home.”

Councillor Scott Bennison said he had concerns the move could also target Airbnb owners, elderly people downsizing in the process of downsizing to smaller homes, or residents in the middle of renovations.

Councillor Merri Southwood supported the idea, saying it was not about “dictating what people should or shouldn’t do with their homes’’.

“It’s simply saying if you have a property that’s unoccupied perhaps you can afford to a pay a little bit more by way of rate income to subsidise those who can’t afford to live in the area,” she said.

There were 1,043,776 unoccupied homes across Australia on Census night.

The proposal was backed by a majority vote of 7-2 councillors at a meeting on Thursday.

The council will now write to the Local Government Minister Shelley Hancock and Planning Minister Anthony Roberts to consider the reforms.

The council will also call for additional rate revenue derived from any tax changes to be directed towards key worker and affordable housing.

Census figures show other councils on the north shore with high number of unoccupied homes include North Sydney with a rate of 13.8 per cent and Mosman (11.3 per cent).

The Willoughby Council area has 8.8 per cent and Ku-ring-gai has 7 per cent.

The move towards tax reform would put NSW in line with Victoria which has an annual vacancy tax equivalent to 1 per cent of the value of property on vacant homes in the Melbourne CBD.