Senin, 03 Oktober 2011

Tax Forum begins

The National Tax Forum begins today: let's hope housing is front and centre in the discussion. It certainly has been in the media, with some very good pieces on last night's 7:30 report, and today on 'The Drum', as well as in last week's Herald.


(Groan.)

The Irvine piece on land tax, in particular, moved Brown Couch reader and legendary tenants advocate, Dr Robert Mowbray, to write to us and second our motion that it be made required reading for anyone interested in housing justice.

And as Robert points out, this is not just about affordability – land tax reform would also go a long way to helping achieve greater security for tenants. This is because security is not just of matter of what the law says about the termination of tenancies by landlords (and as N.C. has recently discussed, our laws still say landlords can give termination notices without disclosing any grounds for termination whatever); it is also a matter of the structure of the rental market and the investment strategies of landlords.

The structure of the Australian rental market is distinctive for absence of large institutional investors, and the dominance of individual landlords who own one property only. These are the so-called 'mum and dad investors' – or 'amateur speculators', as they are known around here. And because land tax is levied on the total value of land holdings above a certain threshold, it strongly favours these small-holding players above large-holding institutions.

And what are these small-holding players playing at? They're after capital gains, and this means being able to sell when it suits them, including into the market for owner-occupied housing. And this means being able to readily oust a tenant and regain vacant possession of the property.

Across Australia, residential tenancies legislation reflects the basic structure and strategy of the amateur speculator-dominated market. And it, in turn, reflects our tax system.