Mayor and MP say 'no' to empty homes tax for Queenstown

by Lauren Pattemore - Aug 15, 2023

Despite overseas success, and support from a New Zealand tax expert and the local housing trust, local politicians aren’t keen to push for an empty homes tax in Queenstown Lakes.

Instead, Southland MP Joesph Mooney and district mayor Glyn Lewers have their eyes on other initiatives to help fix housing and rental shortages in the area.

Mr Mooney is instead focused on loosening tenancy laws rather than introducing legislation to allow for a targeted tax on empty homes.

Local MP Joseph Mooney says an empty homes tax isn't a priority - changing tenancy laws so they don't disincentivise landlords is.

“We need to fix the rental rules so people can rent their properties out, rather than disincentivising people from building and owning houses that they can rent out.”

Mr Mooney says the National Party has its own plans to improve the rental market, which were announced in Queenstown earlier in the year.

They include bringing back no-cause evictions, stopping fixed-term tenancies rolling over to periodic, bringing back interest deductibility, and unlocking build-to-rent housing.

Their proposed changes are “aimed at encouraging more owners back into the market and making more homes available for rent”, Mr Mooney says.

An empty homes tax is also not something Mayor Glyn Lewers would lobby for - opting instead to support some type of visitor levy.

Mayor Lewers says the council has been working with the government on a visitor levy for the past few years.

“A considerable amount of effort has already gone into this proposal and, whilst progress was naturally delayed during the pandemic, it remains our focus over and above any other local taxation proposals."

The most recent available data, from census night 2018, shows roughly 5,000 empty homes in the district - that's 27 percent of housing stock.

But, of course, unoccupied on census night may not translate to sitting empty and ready for renting.

An action of the recently adopted Queenstown Lakes District Council Joint Housing Action Plan focuses on better understanding the number of empty homes in the district.

An empty homes tax has been successful in Vancouver with property owners who leave their home empty for longer than six months of the year taxed three per cent of the property's value.

Mayor Glyn Lewers says a considerable amount of effort has gone towards a visitor levy, so he wouldn't lobby for an empty homes tax.

It's raised $NZ141 million in gross tax revenue since it began in 2017, with money raised funding affordable housing initiatives in the area.

However, without political appetite for it, a tax on empty homes as a means to generate revenue to deal to a housing affordability and availability crisis is not on the table.

It’s a taxation strategy endorsed by New Zealand expert Ranjana Gupta, who says it could be passed through parliament, similar to the way the Auckland regional fuel tax was.

She sees potential for an empty homes tax to be implemented widely.

“The New Zealand government underutilises their ability to levy taxes on property,” the senior taxation lecturer at AUT University says.

“Every year (homeowners) should be required to provide details...regarding the use of (any) property and only one residential property and rented property (per homeowner) should be exempt from tax.”

Vancouver’s most recent report into the success of the tax, released in November 2022, shows a 20 percent reduction in two years in the number of properties listed as ‘vacant’, and instead shifting to being tenanted, sold, principal residences or, in some cases, exempt from the rules.

Queenstown Lakes Community Housing Trust chief executive Julie Scott supports an empty homes tax being looked into, believing it would be well-supported by the public.

Using the best and only figure currently available for vacant properties in the district - census night data from 2018 - and Vancouver’s laws, Ms Scott says the empty homes tax could collect $255 million of revenue for the Queenstown Lakes District in one year.