Housing affordability reforms passes both houses
Reforms to the Housing Tax Integrity Bill have secured passage through Parliament, including a vacancy charge on foreign owners of unoccupied residential real estate.
Today, the government secured passage of the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017, implementing an annual vacancy charge on foreign owners of residential real estate where property is not occupied or genuinely available on the rental market for at least six months in a 12-month period.
The ATO will administer the vacancy charge and be responsible for residential real estate applications under the foreign investment framework.
The vacancy charge will come into effect retroactively from 7:30PM (AEST) on 9 May 2017 for foreign persons who make a foreign investment application for residential property.
In a joint statement, Treasurer Scott Morrison and Assistant Minister to the Treasurer Michael Sukkar said the vacancy charge would address housing affordability.
“The charge provides a financial incentive for the foreign owner to make their property available on the rental market, helping provide more homes for Australian families,” the statement read.
The reforms will also disallow claims for travel expense deductions and limit plant and equipment depreciation deductions to assets not previously used.
Coming into effect retroactively from 1 July 2017, travel costs for individual investors inspecting and maintaining residential investment properties will no longer be deductible.
“This will improve the integrity of the tax system by preventing residential property investors from taking holidays at taxpayers' expense,” the statement read.
“Limiting plant and equipment depreciation deductions will remove the existing opportunities for items to be depreciated by multiple owners in excess of their actual value.
“Together, the travel and plant and equipment deduction changes will improve the integrity of the tax system and are estimated to generate $800 million in budget revenue over the forward estimates.”