Australians could be hit with even more rent hikes as landlords try to offset the cost of a new tax and the potential introduction of rent caps.
Responding to a survey on social media this week, a group of landlords indicated they would raise rents now in case caps on rental increases were brought in.
Rob Klaric who runs The Property Expert International, said landlords are feeling pressured by already having to bear the brunt of soaring interest rates.
‘Landlords will have no choice but to increase their rents to try to recover the additional costs, because they’re being slammed on both sides of the fence at the moment,’ Mr Klaric told news.com.au.
‘If you’re a renter, you’re going to get pushed out of the major cities because it’s becoming too expensive. They’re not earning enough money to pay their rent,’ he said.
A recent poll on a real estate group on Facebook showed landlords would hike rents in repsonse to new taxes and possible rent caps
Mr Klaric said government assisted market rental caps on new housing complexes being built would be a better solution.
‘They’re building all these new units, but they still may be unaffordable for people.’
Mr Klaric said that the problem would affect everyone because people such as essential workers were being priced out of major cities.
He claimed tax increases for landlords was like ‘trying to plug the holes on a leaking bucket’.
Victoria has a social housing wait list of more 65,000, NSW has more than 50,000 and Queensland’s social housing wait list is about 27,000.
NSW Premier Chris Minns recently ruled out rent freezes saying they push landlords out of the market and drop overall rental supply.
But Queensland Premier Annastacia Palaszczuk gave a strong indication that rent caps were a possibility last month when she said the government is ‘looking very seriously’ at how the policy could be implemented.
Victoria is also considering them and has already introduced an additional land tax.
Roughly 860,000 Victorian investment, holiday home or business property owners are set to be slugged $4.7 billion over the next four years under a Covid-19 debt levy announced in Tuesday’s budget.
From January, property investors will pay a fixed $500 fee each year for landholdings worth between $50,000 to $100,000, $975 if above $100,000 and an extra 0.1 per cent for every dollar above $300,000.
It will mean investors pay $1300 a year on average in extra tax.
A short supply of rental properties is causing prices to surge across the country, particularly in capital cities (pictured: renters line up to view a Bondi apartment)
Real Estate Institute of Victoria chief executive Quentin Kilian said the changes would force landlords to leave the sector, diminishing rental supply and fuelling cost pressures.
In his first public appearance since handing down his ninth budget, Treasurer Tim Pallas ruled out an outright rent freeze to curtail a 25 per cent rise in Melbourne rents over the past five years.
But he flagged the Andrews government would look at a rental cap or another form of market intervention to ease the pain for the one in three Victorians who are tenants.
‘There has to be a point at which the community says this has gone beyond reason,’ he told a post-budget Victorian Chamber of Commerce and Industry lunch on Wednesday.
‘I’m not suggesting that we won’t intervene in the way the housing market operates … it’s a question of what interventions are the most appropriate.’
Premier Daniel Andrews blamed a lack of housing supply rather than land tax for driving up rents.
‘Anybody who is applying for a rental and finds that they’re one of 25 different applications or 50 even … they can tell you there’s not enough supply,’ he said.
‘That’s why we need to make better decisions and make them faster.’
His government will hand down a housing and planning strategy statement in September to address the lack of available homes.
Mr Andrews noted land tax is deductible for some landlords under the federal tax system and denied the budget would punish ordinary Victorians.
Source: | This article originally belongs to Dailymail.co.uk
