Vacant Apartments Subject to $5K Penalty - Where Are They?

Lespanys on 28/05/2017 - 15:28

So the government has said they will charge foreign investors $5K for leaving their apartments/houses empty for 12 months.

Now $5K for these investors are surely a drop in the ocean for these investors but regardless, in the spirit of Ozbargain, I would love to be able to contact these investors and offer them a much cheaper option for living in their apartments for very little cost to me. In return, they are free to kick me out whenever they want.

Anyone in the real estate industry know how I can contact these investors?

General Discussion

Comments

  • kywst on 28/05/2017 - 15:51
    +10

    Why wouldn't they just rent them out on the open market and not your charity-me market?

  • Ughhh on 28/05/2017 - 15:55
    +4

    now $5K for these investors are surely a drop in the ocean

    offer them a much cheaper option

    Money probably isn't a problem for them, but the possibility of dealing with a squatter who may trash the house might be though. Probably safer and easier to just leave it empty?

    • xoom on 28/05/2017 - 17:05

      i agree. last i want to have is thousands of dollars of damage from a bad tenant if this was a vacation home.

    • poboy on 28/05/2017 - 21:47
      +2

      It's essentially a cash hold, to guard against the Chinese government taking their money.

      • PowerPants on 29/05/2017 - 08:53
        +4

        Dozingquinn is correct. The Chinese owners don't care so much about rental yield and the trivial token levy because the purpose, for them, of apartment ownership is to have assets outside of Chinese government control (and for some, it is a bolthole in case of a government purge.)

        Think about this: many of these purchasers have bypassed the strict currency controls imposed by the Chinese government which places limits on the amount of cash that can be moved out of the country… this is black money that has been snuck out via many extremely creative means.

        There is a reason that the Australian government consistently refuses to apply AUSTRAC cash reporting requirements on the real estate industry. This anti-money laundering and counter-terrorism financing legislation would significantly curtail the massive flow of criminal and black cash into the Australian property market, and they don't want that obviously because it would curtail property price rises.

  • magikz on 28/05/2017 - 16:09
    +5

    I find this whole penalty really strange. Surely it's up the the owner of the home if they want to have people living there or not? Who's business is it really anyway? A friend of mine brought this up, and I countered that their house has at least one free bedroom which they choose to not rent out. This should come down to choice rather than needing to be enforced by the government?

    • Dungeon Master on 28/05/2017 - 16:33
      +4

      In Melbourne so many foreign investors have bought up so much property close to the CBD that locals and foreign students are getting pushed out and have to deal with ridiculously long daily commutes. Its not a matter of "pay more for something closer then" because the property just isnt being rented out. Victoria bills itself as the education state, but students are choosing other places to study because of the housing crisis and its effect on travel times.

    • Protato on 28/05/2017 - 17:00
      +4

      Foreigners shouldn't even be able to buy houses in Australia, this just a band aid solution to saturate the rental market a bit more.

      • Maverick-au on 31/05/2017 - 11:04
        +1

        Foreigners shouldn't even be able to buy houses in Australia, this just a band aid solution to saturate the rental market a bit more.

        It's not just houses but businesses, land and farms that are being picked up. Other countries don't allow this but in Australia we welcome foreigners with open arms.

  • espanys on 28/05/2017 - 16:18

    I agree your typical landlord could just go on the open market but clearly there are many who do not and they have their own reasons (rightly or wrongly, logical or illogical).

    I just figured some of them might be open to a reliable person to live-in for a privately agreed price / arrangement. A cross between house-sitting and your typical rental tenancy. I'd be fine with a short term arrangement (like house-sitters) - which your typical tenancy in the open market does not cater for.

    • Archi on 29/05/2017 - 13:22
      +1

      so who determines that you are a reliable person?

  • eagleoftheeast on 28/05/2017 - 16:22

    I assume most are in Melbourne Docklands,

    These are often vacation homes for international investors,

    Due to the low rent yield and High rent,($600 a week which is high in comparison to surrounding areas in CBD which causes it to be vacant), they rather leave it vacant. For them $5K is nothing.

    A friend of mine rented one when we were students (6 Years ago, yes I am old), the building was most a less vacant and she rarely had neighbors during a whole 4 degree. Most neighbors only stayed a month or two before moving somewhere alot cheaper.

    • ihbh on 28/05/2017 - 20:16

      Isn't some rent better than no rent? Didn't the investors consider dropping rents to demand levels?

      • eagleoftheeast on 28/05/2017 - 20:55

        I honestly don't really know why?
        Maybe they offered a "rental guarantee" that fooled the investors of the rent value, I read a few off-plan apartments contract that guarantee rent money even when vacant that may last a year or two. This is usually offset-ed the price like a cashback.

        Also Melbourne yield rents are generally lower in comparison to the rest of country. So a $600k apartment wouldn't be worth renting at cheaper price.

        My parents would also go to the conspiracy theory route that that are also trying to laundry money

        • [Deactivated] on 29/05/2017 - 10:33

          The Chinese are just trying to hide their money from their government

  • tranter on 28/05/2017 - 16:26

    If you did this you won't have any of the protections afforded to you if you went through official channels. Very risky.

  • ranap on 28/05/2017 - 17:10
    +1

    Don't know where you can find such houses. However I read somewhere that a similar tax applied by the city of Vancouver was easily dodged by the house owners. The property agents would offer these vacant homes on AirB&B types short term lets thereby technically not being vacant for 6 months. they would use the income from the short term lets to pay themselves and keep the apartment clean costing the property owner nothing (except maybe the risk some nutcase on short term let would ruin their property)

    In true ozbargain spirit, you can offer such a service so that property owners come to you rather than you going out to find them. :)

    • xoom on 28/05/2017 - 17:20
      +1

      i hear an app coming on. #ozbargainrenter

  • RockyRaccoon on 28/05/2017 - 18:00
    -1

    a Newbie TROLL - Lives in "Australia" joined 3 hours ago

    Come in suckers

    • Baysew on 29/05/2017 - 10:31

      OP is a OzBargain newbie.

      offer them a much cheaper option for living in their apartments for very little cost to me

      The OzBargain way would be looking to charge these foreign investors, so their properties aren't deemed vacant.
      (And charge all friends and family and who ever rent as well)

  • Donaldhump on 28/05/2017 - 19:59
    +4

    most foreign investors would laugh at the 5k fine

    • bargainbargain on 28/05/2017 - 20:18
      +1

      Agree - people who have the capacity to leave an house or apartment vacant wont really be bothered with it. Need to make it more meaningful via penalty

    • GaryQ on 29/05/2017 - 20:58

      Perhaps it should be 5% of market value

  • currentfad on 28/05/2017 - 21:58

    feels

  • affable on 29/05/2017 - 07:32

    Nice thought (in theory) to provide that service, as is the government's $5k vacant tax "thought bubble". What are they going to do to police this, check people's water meters? I can see a better service where you just drop by and turn all the taps on once a month for a couple of hours.

  • thord on 29/05/2017 - 11:11

    It's a totally useless penalty. Many of the apartments that are vacant are being bought by wealthy people, particularly chinese, who have a concept of a home being "new". (i.e. they consider homes that have already been lived in "second hand" - kind of like clothing - if someone else has used it and they're not the first, it's not as good in their eyes). They are not going to care about a $5,000 penalty.

    If anything, the penalty should be made much much higher.

    • Baysew on 29/05/2017 - 11:20

      If they don't care about the rent - say even $500 per week $30k per year, another $5k isn't going to be change anything.

  • backpaqer on 29/05/2017 - 13:45

    Surprised they don't buy in NZ… No stamp duty. No capital gains. No land tax.

    • [Deactivated] on 29/05/2017 - 16:36
      +1

      They buy where property values are almost guaranteed to rise. NZ does not fit that definition.

      • mini2 on 30/05/2017 - 15:43

        I thought there's much bigger bubble brewing over there though?

  • HeWhoKnows on 29/05/2017 - 20:34

    You need to understand the Chinese. They are just looking to get their money of of China. Australian real estate is a great and safe place to park money. Especially money from criminal activities! These people care not about investment property returns. They buy the apartment new. Keep it new. And eventually sell it new when they need the money. Thats all there is to it. They are already paying (maybe not) the strata levies. Whats another $5,000pa to them. Nothing. But money for jam for the government….if they can find a way to collect the tax!

    • espanys on 29/05/2017 - 21:17

      If the government can force sales due to breach of FIRB rules, they could also legislate to allow forced selling of vacant apartments if non-payment continues for say, 2 or 3 years. It's tax after all, this country is world class at imposing and collecting tax.

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