Page 2479 - Week 07 - Wednesday, 1 August 2018
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The second reason is that many people who own a second dwelling did not originally get it to maximise income. Sometimes a new house means that there is effectively a household that is not needed or there has been an inheritance. We in Canberra also have people going overseas for a few years on DFAT postings. These families have their rent paid on the posting and they just want to move back into their house when they return. For each of these scenarios, property owners might well be incentivised to forgo some rental income in exchange for having their land tax waived.
It would be remiss of me not to respond to some of the criticism that this proposal has received. It will not result in landlords getting richer. I need to make that very clear. Typically the gap between market rent and affordable rent—affordable rent is defined at 75 per cent rent in Canberra—is around $5,000 or $6,000 per annum whereas land rent is only around $2,000 to $3,000.
We went through a survey of about a dozen houses from Allhomes, and we found that except for one, which was a house in the inner north where the land value was high but clearly the house was falling to pieces, the land tax is equivalent to a bit less than half of the rent forgone if you rent at a market rate. I need to make this very clear. Under this proposal, it would be cooperation. The landlords would take a financial hit, as would the ACT government by not receiving land tax on those buildings. But there is someone who would not have a financial hit: the low income tenant. That is the person working in hospitality; that is the person who is cleaning our buildings; that is the single mother who has not got the resources to pay full market rent. There are a lot of people in Canberra who would benefit from this.
Anglicare’s recent survey found that there was basically nothing for people on minimum wage or Centrelink payment in the ACT to rent privately. The thrust of my motion is to change that deplorable situation.
The Real Estate Institute of the ACT has questioned why this scheme should be run by community housing providers rather than their members. The reason for community housing providers to do it is that community housing providers are not-for-profit organisations whose charitable purpose is to alleviate housing poverty for people in housing need. And they are regulated by a strong regulatory system, the national regulatory system for community housing. The system covers a very wide range of areas, including minimum standards for tenant satisfaction, arrears and responsive and cyclical property maintenance. Community housing providers also have systems for tenant selection to ensure that properties are rented to eligible low and moderate income households, and systems in place for determining and verifying fair market rent, which the rents they charge to tenants are based on.
In short, they have the required social mission, the required expertise and the regulatory framework to protect this investment and make sure that it is not something that can be rorted, unlike some other affordable housing schemes that we could talk about.
I point out that this is not a particularly new or different policy from many that have been tried and tested over the years in different jurisdictions. Community housing providers have headleased housing stock from the private rental market in a number
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