Ghost houses - time to tax the owners of uninhabited homes?

December 12, 2023

Australia is increasing its “ghost house” tax for foreign investors. So is it time NZ did the same? (Source: Breakfast)

There are rising calls for New Zealand to crack down on the owners of so-called "ghost homes" sitting empty amid a chronic shortage in rental availability as Australia is strengthening its measures.

Figures from the 2018 Census and research from community organisation Wise Group suggested nearly 10,000 homes were intentionally left empty across New Zealand that year.

It's thought that figure is likely to be even higher now, with much of the blame placed on foreign owners.

Australia is dealing with similar issues by imposing major tax hikes on foreign investors who buy existing homes and leave them empty.

"I think that we really need to look at incentivising people to want to rent their houses out," rental seeker Hannah Sullivan told Breakfast.

"If you can afford to have a property in Queenstown for example, and you can afford to leave that empty for a year at a time, then lucky you... Why not add a bit of tax onto that?"

Julie Scott from the Queenstown Lakes Community Housing Trust said ghost houses are a "major concern" to the community.

"It's not necessarily the fault of foreign buyers," she added. "It's an issue that's come out of New Zealand, we don't pay capital gains on residential housing, there's a number of issues of why this has occurred.

"I would say it's contributing significantly [to the housing issue in Queenstown]."

Scott said she would welcome a similar measure to Australia's tax initiative, giving owners financial incentive to rent out their homes.

The Government needs to bring in legislation allowing councils to implement solutions that are "appropriate" for their districts, she said.

"This is not necessarily a silver bullet, there's a number of levers that we can pull in the housing sphere to get good outcomes."

Later on Breakfast, Green Party MP Chlöe Swarbrick and New Zealand First MP Shane Jones weighed in on the issue.

Swarbrick said she favoured a ghost house tax.

"We're one of the only countries in the OECD that do not have any form of wealth tax, stamp duty tax, inheritance tax, capital gains tax or otherwise anything that kind of is designed towards addressing those issues with regard to inequity," she said.

"That is particularly profound when it comes to the impacts on our housing market.

"So yeah, we should totally be investigating it if the Government's deciding to take all other options off the table."

Jones disagreed. "The reality is, in 2021, this was already investigated," he said.

"They found that the ghost houses was a kēhua story, it was a ghost itself."

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