Australians have been warned to strap in for further rent increases as landlords get hit with additional taxes under what’s been labelled the government’s attempt to “patch up holes in a leaking bucket”.
A group of landlords surveyed on social media this week indicated they would “raise the rent” on investment properties to offset costs of “new taxes and possible rent caps”.
Property and consumer expert Rob Klaric said landlords were being “hit from all angles” between eye-watering interest rates and now more taxes.
“Ultimately the landlords will have no choice but to increase their rents to try to recover the additional costs, because they’re being slammed on both sides of the fence at the moment,” Mr Klaric told news.com.au.
“While the interest rates are higher and now there’s additional tax, they’ll look at trying to pass those increases on to the tenants.”
The poll results received a frantic response after being posted in a renters’ Facebook group, with many revealing they would be forced out of capital cities if their rent continued to increase.
“If you’re a renter, you’re going to get pushed out of the major cities because it’s becoming too expensive. They’re not earning enough money to pay their rent,” Mr Klaric explained.
“We’re going to start seeing some real sea changes and tree changes in our market, which is going to have a hard effect too because there’s not that much available in the outer suburbs.”
Premier Daniel Andrews’ latest budget, released on Tuesday, revealed property investors and businesses would be slugged with $8.6 billion in “temporary” levies in a bid to contain Victoria’s soaring debt.
About 860,000 Victorian landowners would be impacted, with those who own more than one home paying at least $5000 over the next 10 years.
A new $500 annual tax would be introduced for investment properties with a land value between $50,000 and $100,000.
With rent prices set to continue soaring and wages remaining stagnant, an enormous group of Australians would be left in crisis, Mr Klaric said.
“There’s not enough properties to rent for the lower income market. The average Aussie is struggling and can’t afford to stay where they are.”
Bleak problem with new complexes
New apartment complexes being developed would have the best macro outcome if they were specifically designated as rentals with a Market Rental Cap for essential and low income workers, he added.
“There needs to be some government assistance on new developments where they should be able to cap rentals based on a market rental assessment,” Mr Klaric said.
“They’re building all these new units, but they still may be unaffordable for people.”
Essential workers needed to be paid special attention, Mr Klaric said, given that if they were priced out of capital cities there would be no one left if there were to be another global crisis.
“The reality is, if we don’t have essential workers in Sydney anymore, who’s going to look after the people that get sick? If they can’t live here, we’ve got no one to do the job,” he said.
“We have got a crisis on our hands and the government seems like it’s trying to plug the holes in a leaking bucket which is going to break, and then we really have a problem.”