The Real Estate Institute of Victoria (REIV) has called on the Victorian Government to consider tax reforms to bolster the supply of rental properties and help ease the escalating affordability crisis.
The industry body has asked the government for land tax incentives to help keep properties in the rental pool, rather than a vacant property tax or the proposed short stay levy.
The REIV has also called for a major review and reform of the current stamp duty regulations, including replacing the tax with an alternative that is better designed to support government revenue requirements, while making it easier for homeowners to transact.
They also want to see no new or increased taxes on property as they fear that increasing property taxes will be passed onto renters or lead existing and prospective investors to look interstate for more attractive investment options.
REIV President, Jacob Caine, said the Victorian Government must consider tax incentives as critical to the long-term solution.
“The recent surge in median rents demonstrates that a shortage of rental properties is negatively impacting the financial security of many Victorians,” Mr Caine said.
“Increasing housing supply is crucial to creating a more equitable property market for renters, owner-occupiers, and investors.”
According to REIV, rental affordability is at a record low across the state, with Melbourne’s median rental asking prices climbing 9.6 per cent, to $570 per week, in the past 12 months.
The rising rents are being driven by the low supply of rental properties.
The REIV said private investors supply nine out of 10 rental properties in the state, and three-quarters of these investors own a single rental property.
Mr Caine said the REIV was pleased with the government’s efforts to deliver planning reform and a stronger building industry, both vital in delivering a solution.
“However, we need to pull every lever available to us to address this challenge, and one of those levers is to make owning and retaining a long-term rental property more attractive to investors,” he said.
“Easing this problem will require the Victorian Government to pivot its property taxation strategies towards attracting and supporting investors who provide safe, high-quality long-term rental accommodation.
“The REIV has made several recommendations to the Victorian Government on how these new tax incentives can work, and we’re here to support the Government in any way we can with their implementation.”
