CEO Jennifer Beveridge writes on the budget
Renters on low to middle incomes constantly tell us they are grappling with unaffordable rent increases. Some face the prospect of being made homeless.
The spectre of further upward pressure on rents has been raised after confirmation in the 2023-24 state budget announced on May 23 of additional land tax on second homes and investment properties. But landlords do not need to automatically pass on this tax to renters.
The value of residential land has surged, and the Victorian Government has deemed those with multiple properties capable of contributing to its ‘COVID debt levy’. Landlords – whether they are the so-called ‘mum and dad’ investors or larger entities – do have an active choice about whether they transfer the cost of this revenue-raising measure to renters.
Our good-faith advice to landlords: don’t use the pretext of a new tax – or indeed interest rate increases – to extract more from renters. The provision of rental housing to people is an essential service, and the value of a good tenant is not just down to monetary returns from rent cycle to rent cycle.
We will closely monitor any impacts on renters following the new budget measure. It’s clear, though, that relying on the goodwill of landlords during a housing crisis is insufficient.
Rental market needs more regulation to ensure fairness
Similar to the energy market, the private rental market requires additional regulation to ensure fairness. Legal protections are urgently needed to limit the amount by which rent can be increased. Tenants Victoria urges the government to prioritise legislation for a ‘fairness formula’ that sets reasonable limits on rent hikes.
The ACT has set limits on the amount by which rent can be increased and it’s working well. A similar approach must be considered in upcoming discussions to strengthen renters’ rights in Victoria through the National Cabinet process.
Given that almost a third of households in the state are renters, better solutions for them are imperative. Tenants Victoria will continue to press the State Government for much needed renter reforms, with Premier Daniel Andrews’ welcome announcement today that his government would deliver a comprehensive housing statement in a couple of months.
Our Director of Community Engagement Farah Farouque spoke in the week of the budget on ABC Melbourne Mornings with Virginia Trioli about why we are calling for a fairness formula to regulate the amount of rent increases.