Tax reforms vital to boosting rental supply, easing rental affordability REIV
Jacob Caine Real Estate Institute of Victoria President, says the Victorian Government must consider tax incentives as critical to the long-term solution.
As Victoria’s house and unit rents climb to all-time highs whilst rental vacancies fall to all-time lows, the Real Estate Institute of Victoria (REIV) has advised the Victorian Government to consider policy reforms that will bolster the supply of rental properties and help ease the escalating affordability crisis.
Rental affordability is at a record low, with Melbourne’s median rental asking prices climbing 9.6 per cent in the past 12 months to $570 per week in March 2024, according to REIV data. Low rental supply is a key contributor to this increase.
The REIV notes that private investors supply homes for nine out of ten renters in Victoria, and three-quarters of these investors own a single rental property. The Victorian government's adoption of a taxation posture that attracts new investors to acquire rental properties and supports current rental property owners in retaining their investment will be critical in retaining and growing the rental supply.
Jacob Caine REIV President, says 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. Increasing housing supply is crucial to creating a more equitable property market for renters, owner-occupiers, and investors, "stated Mr. Caine.
“We agree 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.
“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.”
( Source : The Real Estate Conversation 17 April 2024 )