Institute for Social Change News

An overhaul of property taxation, planning reform and smarter government interventions are the key focus of a new Institute for the Study of Social Change report on Tasmania’s housing crisis.

The report, titled A Blueprint for Improving Housing Outcomes in Tasmania, proposes three areas of reform: a phased-in overhaul of property taxation; planning and other regulatory reform; and strategic government spend­ing (incentives and infrastructure).

Lead author and Institute director Richard Eccleston said the report, which is the third in the Institute Insight series, outlines a politically and economically viable pathway to a fairer property tax system and improved housing outcomes in Tasmania.

“We at the Institute are the first to acknowledge that housing markets are complex and that a long-term, coordinated approach involving all levels of government is required to address the housing crisis,” Professor Eccleston said.

“However, this does not mean the Tas­manian government can sit on its hands and wait for the Commonwealth or other states to act. We urge the next Tasmanian government to lead by example and introduce evidence-based reforms that are likely to deliver longer-term results, while encouraging other Australian govern­ments to follow by introducing complementary measures.”

The report includes previously unpublished data courtesy of New York based data analysis website Inside Airbnb, which, for the first time, shows how rapidly the home share economy has grown, particularly in inner Hobart.

The number of ‘entire properties’ listed on Airbnb in the Hobart local government area has increased from 250 to 876 over the past 18 months, while Tasmania-wide the number of total Airbnb listings has grown from 1827 in July 2016 to 4552 in January 2018.

“We accept that some of these properties are granny flats and other self-contained units, which would not otherwise be available for long term rent,” Professor Eccleston said.

“However, if just 70 per cent of the ‘entire properties’ listed in Tasmania in January 2018 were previously in the long term rental market, it would mean that approximately 2500 homes state-wide, and more than 600 homes in inner Hobart alone, had been removed from the private rental housing pool.”

“I’m not for banning Airbnb, which is now a $90 million business in Tasmania. What we need is a clever policy framework that will allow us to capture the benefits of Airbnb without decimating inner city rental markets. There are a number of options for achieving better outcomes, including strategic zoning and levies in certain suburbs.”

Recommendations in the Insight report include:

• Simplifying property taxation by integrating the administration of Local Government rates and State property taxes.
• In the short-term, replace Tasmania’s existing, complicated stamp duty regime with a simpler and fairer system, which would provide stamp duty relief to buyers of low to medium priced homes.
• Over the longer term, gradually phase out stamp duty and replace it with an annual low-rate, broad based tax on all residential property.
• Regulate the number of entire properties that are converted from long term rental to short term holiday letting in key inner city markets while supporting the growth of the sharing economy in regional Tasmania.
• Increase the supply of social and affordable housing in Tasmania through partnerships with the community sector and private investors. Funding secured through a combination of property tax reform and by urging the Commonwealth to forgive (or alter the repayment of) Tasmania’s historical housing debt.
• Develop and implement a state-wide integrated planning regime that identifies and stimulates residential development in priority zones where there is good access to transport, employment and services.

Read the full report via our Institute Insights page.