GUEST BLOG: Bryan Bruce – Tax the Ghost home!

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What’s on my mind asks Facebook?

OK..2 things.

A shortage of building materials means there will be a shortage of housing for a lot longer now.

That means house prices and rents will continue to go up.

So… what to do to increase supply?

TDB Recommends NewzEngine.com

One partial answer – Tax the Ghost homes.

A small but helpful thing would be to make it financial folly to own an empty house for over a year.( A so -called ‘ghost’ home.)

According to the 2018 Census, there are approximately 40,000 empty private homes in Auckland.

That is 7.3 percent of the total, up from 6.6 percent in the previous Census in 2013.

And Auckland is not the only place in Aotearoa with vacant homes at a time when accommodation is expensive and in short supply.

There are ghost homes in other cities, in towns and in rural areas.

Now, I understand that an owner might have a legitimate reason for temporarily owning an empty home – but 2 of them? 3,4,5,6,7 of them ?

A significant number are empty simply because the owners are focused on capital gains.
In this regard the government has made a move in the right direction by extending the brightline test but I’d also put a super tax on ghost homes to make it more viable for the owner to either sell the property or rent it out rather than land bank it.

If local councils were made responsible for collecting the super tax ( let’s say 10% of the properties GV each year) and were require to spend that money on new rental housing , that would also help a bit with housing folk who cannot afford to buy a place of their own.

This ‘ghost home’ problem is not of course unique to NZ so we could certainly look overseas for some inspiration.

For example, the Scottish Empty Homes Partnership was set up in 2010 and aims to bring the country’s 40,000 privately-owned, long-term empty homes back into use. The partnership is funded by the Government and encourages each of Scotland’s 32 local authorities to have a dedicated Empty Homes Officer. There are currently 24 officers who work to bring vacant homes back into use by providing advice and information, and encouraging social landlords, community groups and private bodies to engage in empty homes work.

Around 100 empty properties a month are being returned to occupation across Scotland.

 

Bryan Bruce is one of NZs most respected documentary makers and public intellectuals who has tirelessly exposed NZs neoliberal economic settings as the main cause for social issues.

27 COMMENTS

  1. No problem taxing a ghost home if not in process of improvement or demolition for new build. But I’d like to see where these 40,000 ghost homes are? I simply won’t believe that there are 40,000 empty homes in AKL. Someone show us 40,000 photos of these ghost homes please.

    • Jaspinda NZ has over 40000 homeless people. Would you like to see photos of 40000 homeless people before you believe it?

    • Some of the empty homes got caught up in the ‘Meth’ scandal and were deemed uninhabitable, then there is probably a lot more than 40,000 that are leaky or have a major problem once built https://www.nzherald.co.nz/business/whacked-with-huge-costs-163m-estimated-to-fix-defective-auckland-apartments/IZPBJLVZDTFZU5ZQOEPIBP7BKY/ https://www.rnz.co.nz/news/national/437310/hundreds-of-hot-water-valves-to-be-repaired-at-new-christchurch-hospital?fbclid=IwAR0VkhCegqk3iWP0Uh-hCJJ3FdUmWsvkgKJjpQCJAIkZIsSpfC-xAZYKJuA

      You can’t rent out any home now unless it is upgraded with healthy homes etc… they then become AirB&B’s… many houses now are not able to be rented as they are not upgraded enough. A lot of baches and houses from the old days do not have proper documentation from council as the owners built them themselves etc.

      Two biggest problems with supply are mass immigration of the past decades and an inability and unwillingness to stop bad building practises like leaky and substandard buildings which mean the new supply often need remedial work almost as soon as they are built or within 20 years, (with some that actually are so poorly built they never get moved into) and so go out of supply as soon as they come into supply and then the owner still needs somewhere to live while their house is being repaired for years.

      Sadly since the woke got the building industry to advise them, while being one of the main sources of the problem of poor workmanship, things seem to be getting worse with housing shortages and unaffordability.

      • When the response is better than the article.
        We have an empty home we bought in a high rental demand area. It should be rented but it will be a long time before it is. We need trades people to bring it up to healthy homes standards. They are busy the work is slow. Not masses to be done I could live warm and dry in it, but I can’t rent it until the work is done. I bet there’s lots of homes like that, then there is the mine field of renting and dealing with tenants who may not look after the property and you can’t easily get out. It may be that it is better to leave it empty an extra 8 months until my kids are ready to move in. I bet there’s lots of houses like this. And it sounds posh buying a house for your kids but as we would be paying their rent while they are studying for the next few years it made more sense to pay a mortgage and they could have decent accomodation. We have worked super hard all our lives to be able to do this, no annual overseas holidays or baches etc. I don’t see how taxing us for taking care of our family is even remotely fair. I imagine we represent the middle hardworking kiwi family. On the other hand, to keep things balanced, I visited my hometown, Napier last year, I am always struck by how much bigger it is every time I go, I am always saddened by this, the loss of the very fertile land that was once referred to as the fruit bowl of nz. Nibbled away at by more housing, all over Nz as councils are not held accountable for failure to protect food growing/producing land. I wonder where all these people have come from as Napier’s infrastructure struggles under the burden, sewage and clean drinking water. To my shock as we walked around the port I was confronted with a hotel filled with homeless people. NZ people not recently immigrated people. It would seem that, before the government, because the people don’t get a say, agree that anyone else can move to NZ, they should first house people who have nowhere to live and ensure that basic infrastructure is in place. Once this lofty challenge is completed all new immigrants should need to have appropriate accommodation organised before they can move here and not excessive numbers in one home. To me this sounds like basic governance and care. Those NZ families living in hotel rooms stuffed together is a shaming site on the government.
        I hear repeatedly that we need all these immigrants because NZers are lazy and won’t work for the low wages. NZers are not lazy just because people keep saying something doesn’t make it true. Pay proper wages and people will work.
        That’s a really long response but it’s all interlinked, and one can’t be addressed without acknowledging the rest.

    • Jaspinda: “I simply won’t believe that there are 40,000 empty homes in AKL.”

      I’m also dubious about these figures. I don’t know how that information would be collected.

      I’ve been filling in census forms for as long as I can remember, and it asks only about one’s housing situation, whether one’s home is owned, rented, in a trust. So the census collects information only from people who fill in the census forms.

      The 2018 census was the first to be online, and in terms of return rate, it was a dismal failure. I don’t think that it’d be wise to rely on anything much coming out of it.

      Maybe the “40,000 empty houses” is an estimate or an extrapolation? Either way, it think it wise to be sceptical.

      I do not know who’d have this type of information: certainly not local authorities.

      • I agree with your skeptical take on things and would like to delve into the raw data. This is mostly because I don’t see empty houses around me, and I don’t know anyone personally who owns an empty house. That being said, it is obviously more of a rich person type of thing to do because the rest of us couldn’t afford to keep a home empty.

        In Australia there is a yearly survey using water consumption to estimate the number of empty homes. Did someone do something similar here in NZ?

      • Other areas of NZ don’t have water meters. And if they were used to establish if tax were payable then I can see plenty of rich people wasting water just to avoid the tax. We basically need to identify the occupants in each property.

        Certainly we can’t keep paying for endless tenancies in motels.

    • 40,000 empty homes in AKL?

      Could be cause for scepticism but SaveNZ probably has a point: not only those that are empty which could be rented but aren’t due to, well, the insinuation that housing stock is bought for the quick flick by those who can afford to do this (though that won’t be happening now), but also inclusive of those in various states of disrepair or condemnation , or the numerous baches in the coastal fringes of AKL that are mostly unoccupied most of the year, a bit like the thousands of motor boats and yachts tied up in marinas. Taken together 40, 000 might not be such an unbelievable number but without the data, yes, somewhat speculative.

  2. Yes, Bryan, decisive action of the kind you suggest is possible.

    However, were governed by an incompetent coward with a lot to say -but little of it making much sense, but now we are governed by an incompetent coward with nothing much to say at all.

    Nevertheless, she is still quite popular because most people are grossly uninformed/misinformed.

  3. Just drive around NZ and see all the empty old homesteads, sitting there rotting away for years. Are they ghost homes? Here in Welly there seem to be many old weed-lined houses with curtains constantly closed -who lives there, if anyone? It’d be easy enough to employ a few people full time to go around these houses, looking up ownership is easy although a small cost involved. Someone could even start up a Go Fund Me for this

    • Often owned by very elderly widowed people who would like to move into something smaller but also want to stay in the neighbourhood they have lifelong ties to.

      The lack of suitably designed small apartments and townhouses for them is because of hostility from councils, locals not wanting change to heritage values or higher density, and builders only building what they know they can get an easy consent for and and easy sale once built.

  4. 100% Bryan.

    It’s an accepted fact that there are many thousands of homes around NZ that are deliberately left vacant long term by their owners. Any person who does this why there is record homelessness in NZ is the epitome of a greedy selfish git. They need to be rooted out and a meaningful consequence served up to them on behalf of all decent Kiwis by the taxman. I was genuinely shocked this was not addressed by the Government in the recent announcements to made inroads with the housing crisis. It’s my contention that a high percentage of these homes are owned offshore by the usual suspects. With those “investors” not having an NZ IRD number, taxing them is not so straightforward. Time for some retrospective laws to be introduced in this area. That will require stepping on powerful and wealthy toes who will not stop bleating should it occur.

    Exactly the same situation and dynamic is present with land bankers around NZ. With home building land at a premium, how is land banking accepted during a housing crisis and while record homelessness rage on? A machine feeding and encouraging selfish greed. Well past time to disincentivize this morally corrupt business practice.

    • “With those “investors” not having an NZ IRD number, taxing them is not so straightforward.”

      I beg to differ. These offshore empty homeowners are all presumably paying rates, so collecting extra money from them shouldn’t be a problem. And as this issue seems to be most concentrated in Auckland, make the empty homes tax, or levy, a regional scheme administered by district councils, just like the current fuel tax. As we all know, collecting increased revenue in the form of rates is the sole function Auckland City Council actually excels at.

  5. 10% of GV as a tax is a JOKE. If someone can afford to leave a place vacant, for whatever reason, a piddly 10% is NOT going to have an impact.
    Maybe 50%, with Govt/council rights to take possession significantly quicker than usual should the owner ‘not be found’ or they just ignore ‘the tax’, would have a REAL effect, i.e NOT a Claytons law, which in today environment might be better called a JacindaBlair law
    ….i.e. one that has NO intention or desire to do what it looks like it does ‘at face value’.
    This could be her legacy. The Jacinda law !!!…fiddling while New Zealand burns.
    p.s. I am a left winger and would vote for Bombers Aotearoa Pa party if it ever gets set up.

    • 10% of the GV is not a piddly amount when applied to the average cost of a house in NZ. With the average price approaching $1M is $100000 pa in tax. If the investors want to just wear that amount good for them. I hope they do it for 10 years. Do the math on even half of the 40000 empty homes. thats … well ..um.. a fuckload.

  6. There is a long history of land occupations in this country, from Parihaka to Ihumātao by way of Bastion Point and Pākaitore/Moutoa Gardens, among others no doubt. So, what will be the government’s response if protesters decide to occupy a few ghost houses? It’s the sort of thing that followers of Martin Luther King might have done in a similar situation, not to mention Gerrard Winstanley and the Diggers. With such abundant precedents, this seems like something that’s bound to to happen if things just carry on as they are. Yet at the same time it would raise the nation’s temperature to boiling point because private property rather than public lands would be under occupation for the first time.

    • No, it would not be the first time private property was occupied – Maori land was illegally taken which is why we have ongoing disputes.

      What you suggest is that more people experience the same upheaval, mostly wealthy and white this time around. Let’s find a fairer method that avoids a build up of resentment

  7. Thay are just sinks of greed and they must be either heavily taxed or confiscated and demolished to make room for several affordable homes.

  8. Allow squatters right, as the UK had in the 1990’s (the last time I lived there, and I assume still exists). That would frighten away the off shore empty house owners, and make more housing available.

  9. I seriously don’t understand why you think government are going to help you or get you into your own home. They’re taxing the shit out of everyone. Doesn’t matter if you have money or not. You should be focused on your own life and getting better at what you do, work even harder to get more of a down payment for a house. If your not making positive steps in that direction, your missing out as the govt are printing money like crazy!! You will be priced out of everything. Any money you have now will be worth less next year etc. so hedge your bets and invest in either stocks or crypto if you can’t buy a property. At least your money will go up with inflation. Instead of being worth less every year in the bank. The politicians are f ing all you people who say they need to do xyz. Stop focusing on that shit. They have an agenda and it doesn’t involve you and your crying.

    Anyway good luck to the 1 person that takes this advice and finally figures out that the govt are a cancerous leech sucking the life out of everyone. Them and the banks are the ones that started all the BS with inflation etc. all the parties are the same!!

    Bye

    • The government made you rich you idiot. You are not a Warren Buffet. After COVID, if the government hadn’t stepped in and saved all you scumlords arses by dropping interest rates, removing LVR’s and printing money your house would have dropped 50%. THE GOVERNMENT DID THAT.

  10. I really like the Scottish example. We could do that without a tax. If we got 100 homes a year it would be a good start.

  11. I found out one is not allowed to comment negatively against Ashley Church without being deleted by the Ed for a ‘potentially libelous comment’ (interest.co.nz) my comment was that Ashley Church is a hypocrite and Jesus would be ashamed of him. Another commenter deleted for pointing out that Ashley Church being a Christian doesnt gel with Christianity. Ashley Church must have alot of riches to be throwing his weight around and stifling negative comments on public forums like that

  12. Heard Ashley Church on Magic talkback radio this morning and he was toeing the Tory line. He talked about investors and not about speculators and that they are good business models. So did the other tories on the show. He believes that being able to put a deposit down was the solution to the housing crises or interest only mortgages/loans. I am shocked that believes that house prices will increase substantially in the next year or so. He did not explain why house prices in NZ were some of the highest in the world. Funny that the radio program then discussed the increase in min wage and the business commentators expressed the evil work of Labour and paying workers a minimum wage.

  13. Stamp Duty on all dwellings (1%-2%) and then a CGT on every other dwelling other than the family home. 45%! That’ll take the ‘steam’ out of the market for some time. It’ll force that dead money into the ‘productive’ sector(s)!

    A house across the road from me was on the front page of the Herald recently where the owner of seven months had recently sold the property for $700k more than they had paid for it. It sat empty all of that time.

    So, which government will do this?

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