We’re investigating rental affordability in Australia. Currently, we’re looking into rental rights and affordability in Queensland with help from Tenants Queensland and we’re hoping to connect with Queensland renters. If you’re in a position to talk to us about this issues, please leave a comment or get in touch via DM.
I am selling and not re-renting property in Qld with the final nail being that despite offering so many discounts and incentives the tenant has refused to allow 4 weeks of open houses and photos during the 2 year lease. The legislation has swung too far on the pendulum, and this means less people will choose to rent out, as it is becoming more inflexible and onerous. If for some reason I keep property for rent there, it I will only offer 6 month leases from then on - and that situation makes no one happy.
Qld land tax for me as a landlord has gone from $1847 to $1954 to $2400 to $2667 to $2933 to $3200 to $3633, (in addition to how much interest rates have gone up) i.e. almost doubling in 6 years, so there should also be an earnest discussion with the Qld government.
Also, if there were government incentives for landlords to put solar on the roof then I would do this for them, and make electricity cheaper, but with interest rates going up there are now too many other costs.
The Queensland Government is now seeking submission relating to stage 2 of proposed rental reforms. Submissions close at 5pm on Monday May 29th.
Apologies if I see this as dancing around a solution but nobody seems to take up the idea that tax management could go some way to solving the problem.
Make long term rental income taxed at not more than the capital gain rates as it is today. Maybe even less to prime the pump? Capital gain taxes and their privileged nature are for another topic.
Since landlords and people in general are profit and income oriented there is currently a reward for investing for capital gains, and renting short term for maximising income streams. Tax it so that is not the case and I suspect the economics would attract investors as well as business to start engaging in building to rent (long term) rather than flipping properties as well as tenants.
I wonder how this would fly.
Just as if you hold an investment subject to capital gains tax for less than one year the 50% discount is not available, then,
If you rent out a property for less than one year leases, ie Airbnb, holiday home rental when one is not using it, and short leases so a landlord can boot out tennents at short notice if they want to sell, or jack up the rent quicker than once a year, then you cannot negatively gear in the tax system. Ie, apply excess investment deductions against employment income to reduce one’s tax.
Like capital losses can only be used to offset capital gains, then investment losses can only be applied to investment income. One can bank both for future offsets.
I thought the policy of Labor in 2019 was a good one. Negative gearing only available on new housing, not existing property that an investor may buy. That would have helped the supply of new housing built to modern standards.
Sadly, it spooked the voters.
Reporting every let as well as rental increases, et al seems a bit over optimistic re compliance. Surprisingly not everyone uses negative gearing and those who have lots and do not need to would escape a related scenario. Are they a few or the many, I do not know.
I like to keep the rules simple. Keeping track of anything beyond income would replicate the complexity and record keeping of our system.
Future offsets or credits allows opportunistic gaming along the way, similarly to how one can drive through a speed camera ‘average speed’ section, eg hit 200 kph with a stop to have a picnic, average 105 in a 110 section - hoping that made sense in context.
Real Estate Agents have a very strong interest in hiking up rents, irrespective of the owner’s wishes.
The industry standard commission fee is 8% of the Rent, if an agency has a rental roll of say $10 million per annum, a rental increase of 10% is worth an additional modest $80,000 for doing very little extra work. What’s not to like for Agents pushing rents as high as they can. Nice work if you can get away with it, and they are.
Terminating leases and re-letting is another bonus for Agents, they charge owners 1 weeks rent as a letting fee, in a market where rental properties are in critical short supply, churning over tenancies is another license to print money, that many Agents cannot resist, and costs are picked up by tenants and owners.
What’s not to like about this for an avaricious Real Estate Industry, especially where ethics are in short supply.
Protestations by Real Estate Agents, about a high standard of ethics and caring for tenants and owners doesn’t really stand too much scrutiny, they are the beneficiaries of a tight property and rental market, and in the current climate it is easy money for the unscrupulous operator, and sadly there are far too many of those.