The ACT Greens will urge their Labor government partners to give landlords an exemption from paying land tax, if the property owners cut their rent by up to 25 per cent, compared to the potential market rent.
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The proposal, Greens planning sopkeswoman Caroline Le Couteur believes, would help provide more affordable rental homes in the nation's capital as low-income tenants struggle to pay the equal-highest average rents in the country.
It has the backing of the territory's community housing sector, and forms part of one of the general housing affordability measures included in the Labor-Greens 2016 parliamentary agreement, modelled on a similar program now running in Melbourne and Sydney.
Ms Le Couteur will put a motion to the ACT Legislative Assembly this week, urging the tax exemption to be provided for landlords willing to house tenants who only pay 75 per cent of the potential market rent, if the property is managed by a verified community housing provider.
The proposal would see landlords willing to forego 25 per cent of the potential market rent on their property, while the government would similarly forego the land tax revenue associated with the property - a tax usually passed on to tenants.
Ms Le Couteur said it was one potential low-cost way the government and community-minded landlords could combine their resources in order to provide more affordable rental properties to Canberrans on low incomes.
She said the government was plainly failing to meet the need for affordable rentals in Canberra, and that renting out properties below market rates was a great opportunity for landlords who were prepared to go part of the way to help their fellow Canberrans.
“Offering a land tax discount to these landlords would be an incentive and a reward for doing
something concrete, and quite significant, to address the ACT’s housing affordability problem,” Ms Le Couteur said.
She said a number of recent reports showing few, if any, homes were affordable for ACT residents on the minimum wage, while the territory also had the highest proportion of people who receive Commonwealth rent assistance still experiencing rental stress.
“This is the reality of life for many Canberrans, but landlords aren’t necessarily the bad guys," Ms Le Couteur said.
"With a little encouragement, the ACT’s landlords could be a significant piece of the puzzle as we work toward ensuring all Canberrans have a place to call home.”
While the minor party has not fully analysed what impact the policy would have on the territory's coffers, if the land tax foregone was about $5000 a year, based on a property with an average unimproved value of $500,000, it could cost taxpayers as little as $500,000 a year to provide an extra 100 affordable rental properties.
Relying on existing properties already in the market, if the government agreed, the proposal could also provide a new affordable rental option for low income Canberrans, without the need for greater capital investment by government or the community sector.
Based on a three-bedroom house in Kambah on the market for rent at $570 a week, the government would forego $3,239 in land tax and owner would forego $7410 in annual rent, with the tenant paying $427.50 a fortnight.
Or, based on a one-bedroom unit in Campbell renting at $300 a week, the government would forego $1557 in land tax and the owner would forego $3,900 in annual market rent, with the tenant paying $225 a fortnight.
Correction: This story has been corrected, to reflect the rental examples in Kambah and Campbell were per week figures, not per fortnight, as previously reported.
