As Deputy Chair Board Member of the Property Investment Professionals of Australia (PIPA). On Tuesday, 27th of February, I had the privilege of representing PIPA at the Victorian Liberals and Nationals Public Hearing Day on Tax Reform, chaired by Brad Rowswell MP, Shadow Treasurer.
The focus of my address was to shed light on the pressing issue of anti-investor taxes in Victoria and their detrimental effects on both property investor sentiment and the supply of rental accommodation.
The Impact of Anti-Investor Taxes
Victoria has seen a surge in anti-investor taxes, which has led to a significant downturn in property investor sentiment. These taxes have not only discouraged potential investors but also strained the existing ones, leading to a decrease in investment activity in the property market.
The Rental Accommodation Crisis
The decline in property investment has directly impacted the supply of rental accommodation. With fewer investors to provide rental properties, the availability of rental accommodation has dwindled. This has exacerbated the rental crisis in Victoria, leaving many potential renters struggling to find suitable accommodation.
Key Statistics & Issues Affecting Victoria
Here is a summary of some critical statistics and issues impacting Victoria.
- Rental crisis in Victoria: The median weekly rent for a dwelling in Greater Melbourne rose by 15.7 per cent in the 12 months to June to $500, while the rental vacancy rate was 1.3 per cent.
- Investors exiting the market: The 2023 PIPA Investor Sentiment Survey found that 12.3 per cent of investors sold one or more properties in the previous year, and 38 per cent feel likely to sell within the following year. The most common reason for selling was increases or threats of increases to taxes, duties, and levies.
- Victoria’s perception among investors: Victoria ranked fifth among the states and territories regarding investment prospects, with 4.7 per cent of the vote. It also ranked last regarding how positively it supports property investors, with 57.4 per cent scoring it an eight out of eight.
- Stamp duty and land tax issues: Stamp duty is a punitive and inefficient tax that adds tens of thousands of dollars to the purchase price of a property and restricts housing supply and affordability. Land tax changes have also reduced the land tax-free threshold, upped the tax rate, added a fixed charge, and expanded a vacant property tax.
How do property investors feel about the market?
To gain great insights into the mood, confidence, and key trends underlying the Australian property investment market, you should read the 2023 PIPA Annual Property Investor Sentiment Survey.
This survey, conducted in August 2023, surveyed more than 1,700 existing and aspiring property investors nationwide. It revealed their views on topics such as:
- Property prices and rental yields
- Interest rates and lending conditions
- Taxation policies and government support
- Property management and tenancy issues
- Investment strategies and goals
To see the findings of the survey, please click on the links below:
PIPA Annual Investor Sentiment Survey 2023
August 2023 PIPA Annual Investor Sentiment Survey Results
Proof the war on investors is only hurting tenants, as hundreds of thousands of rentals disappear
The Role of Property Investment Professionals and Associations
As part of the solution to this crisis, property investment professionals and associations like PIPA play a crucial role. We are committed to advocating for the rights of property investors and working towards a more balanced and fair tax system that encourages investment rather than discouraging it.
In conclusion, the tax reform hearing was a valuable opportunity to highlight these issues and advocate for change. By bringing these concerns to the forefront, I hope we can work towards a solution that benefits property investors, renters, and the broader Victorian community.
For more information about PIPA, please visit the website at www.pipa.asn.au.
