Property Management
Abercrombys Investment Insider June 2023
14 June 2023
by Dee Pajevikj
Every year the coming of winter is accompanied by a psychological imperative to snuggle down, to nest, to settle in, to find a place to shelter from the storm, as it were. Who doesn’t want a roof over their head when the leaves start falling? In the short, bleak days surrounding the winter solstice the rental generally slows, and it has slowed over the past month.
The deceleration of new leases being signed doesn’t mean the market has lost vibrancy. To the contrary, prices remain strong – it’s a very good time to be a lessor. Few other investments are making returns to compare with a rental property.
There is much conjecture at the moment as to whether the Andrews’ Government recent tax hikes will flow on into rent hikes. Elinor Kasapidis, Tax Policy Manager at CPA Australia labeled the rises as “appalling” and said they threatened to make a bad situation worse. She advised the government to rethink its position.
“Many landlords will be unable to afford this additional cost. On top of wall-to-wall rate hikes for nearly a year, this additional cost will push some mum and dad landlords into the red. To foot this bill, they will be forced to increase rents at a time when there is a national housing affordability crisis,” she said.
While Tim Pallas has disingenuously denied rent rises will result, Ms. Kasapidis is right. Landlords must, inevitably, pass on costs. But urging a Labor government to reconsider tax rises seems to us akin to asking gravity to take a break. You’re unlikely to get a response.
So with the end of the financial year approaching lessors should be now preparing appropriately for the new tax regime.