Greens propose new tax on commercial property owners to revive empty Melbourne shopping strips   


January 25 2025
ABC News

The Victorian Greens are proposing a tax on commercial landlords to breathe new life into struggling Melbourne shopping strips such as Chapel Street in Prahran. 

In short:
Victorian Greens have made a pitch to voters to breathe new life into 'dead' shopping strips ahead of next month's Prahran by-election.

Their proposal is to slap a 2 per cent commercial vacancy tax on property owners who have kept their premises empty for more than six months, incentivising landlords to keep shops tenanted.

What's next?
A by-election will be held in the state seat of Prahran on February 8.


The Victorian Greens are proposing a new tax on owners of vacant shops with the goal of revitalising empty shopping strips.

The party's announcement on Saturday comes ahead of a by-election in the seat of Prahran in Melbourne's inner-south where the once bustling Chapel Street is struggling.

The plan is to introduce a 2 per cent commercial vacancy tax on owners of properties that have been empty for more than six consecutive months of the year.

The Greens say this would push landlords who have kept their stores empty instead of lowering rent, to get tenants.

Vacant shops in Chapel Street
The Greens candidate for Prahran says many people in the area are sad so many local shops have closed.

The party says independent costing conducted by the Parliamentary Budget Office forecasts the policy would raise around $258 million in state revenue over four years.

Greens candidate for Prahran, Angelica Di Camillo, said the money could be used to provide direct support for traders, artists and pop-ups in vacant premises.

Young woman and middle aged man pictured side by side on Chapel Street
Prahran by-election candidate for the Victorian Greens, Angelica Di Camillo, announced the party's new tax proposal alongside the party's national leader Adam Bandt.

"You only have to walk down Chapel Street to see how dead a lot of the shops are, how empty they are," Ms Di Camillo told reporters on Saturday.

"People are really frustrated about it and it's coming up a lot that people want to see something done about this."

She said the Greens would seek the state government's support for the new tax.

"We've been working to push this and having discussions around it (with the government)," she said.

Ms Di Camillo said in recent conversations with voters about next month's by-election many people had raised the issue with her.

"Going down further towards Carlisle Street, for example, in Balaclava, you see a significant amount of empty shops," she said.

"A lot of the time, landlords are putting up the rent and if they don't get that rent, they're happy to leave it empty and it's really impacting our neighbourhoods here.   

Shop with a 'for sale' sign in Chapel Street
There are numerous vacant shops in Chapel Street, which the Greens say is a concern for the local economy.

"Empty shops means less local jobs, it hurts the local economy and our vibrant neighbourhood."

The Prahran by-election, prompted by the departure of Greens MP Sam Hibbins, will be held on February 8.

There's also a by-election in former Labor government treasurer Tim Pallas's seat of Werribee on the same day.

How do the idiotic Greens intend to force occupancy of vacant shops?

freediver wrote on Jan 28^th, 2025 at 9:25am:


So the premise of this scheme is to make the cost of a commercial building more expensive in an effort to lower rents.

Good work Greens.

freediver wrote on Jan 28^th, 2025 at 9:25am:



I know Chapel street -
you'd have to be a sucker to buy anything there -
even T shirts cost $100 each.

The rents and rates are super high.
That's why it's all closing down.

Quote:




The Greens mentality. Rich people with their cunning plans get "tax perks" from losing money on their investment.

John Smith wrote on Jan 28^th, 2025 at 4:54pm:


you say you own a business but you seem to lack business sense. If they do manage to put a tax on vacant properties the cost of renting will be impacted. Investments are tuned to make a % of profit, increase the insurance up goes the rent, increase the cost of services, up goes the rent, increase the taxes, up goes the rent. Investors total all the costs before factoring in the return %. A vacant tax will simply become another cost to be passed onto the renter.

Leroy wrote on Jan 28^th, 2025 at 5:13pm:


If the shop is vacant there is no renter to pass the tax onto you dumbarse

John Smith wrote on Jan 28^th, 2025 at 5:16pm:


I take it you watch that 70's show.

Like I said you need a business mind to when dealing with property.

If the property is vacant for tax purposes then it would be to reduce tax from other leased property. If its your only property then there is no tax advantage. It will raise rents across the board to cover the increased costs. But don't take my word for it ask anyone over 17.

John Smith wrote on Jan 28^th, 2025 at 5:29pm:


You don't seem to understand that any cost involved in an investment property will be factored in when setting the rent. When an investor looks at renting out a property they will recoup all costs including any tax they paid while the property was vacant. It will just be included in costs and added to the rent, just like any other tax is passed onto the tenant. In fact it will probably end up a windfall for investors because it will raise rents and those that have renters will just pocket the extra money.

Bobby. wrote on Jan 28^th, 2025 at 5:39pm:


In commercial real estate you need at least 10% vacancy if not more. The reason being if vacancies are very low then rents increase, if vacancies are over 20% then rents will drop.

Market forces will dictate the cost of rent, you can fiddle with the knobs but it won't make any difference. Any costs incorporated in holding a commercial property will be passed onto the renter. Ask any real estate agent what will happen to rents if they put a 2% tax on vacant property.

John Smith wrote on Jan 28^th, 2025 at 4:54pm:


If this idiotic policy gets passed, then we'll see one of two things happen - perhaps both. Either the people who own the shopping centres where they lease the shops to tenants will sell the shopping centre rather than pay an additional tax, or they will pay the tax and hike the rent of every other shop in their centre, forcing tenants to raise their prices to cover the additional rent, meaning the consumer ends up paying.

Armchair_Politician wrote on Jan 28^th, 2025 at 7:04pm:


Not an issue either way


Armchair_Politician wrote on Jan 28^th, 2025 at 7:04pm:


which would result in more vacancies and more tax for them to pay until the center is empty, .. the end result is they pay a fortune in tax until they are leased, sell at land value, or they stop ripping off their tenants and rent them out at market prices to avoid paying the tax

John Smith wrote on Jan 28^th, 2025 at 5:17pm:


And you explained that merit by parroting the Greens mentality - rich people with their cunning plans get "tax perks" from losing money on their investment.

freediver wrote on Jan 29^th, 2025 at 6:59am:


I explained it by stating the reality of it.

It is only you who is obsessed with the greens. I've no idea what the greens mentality is. You on the other hand once wanted to join the greens so it's no wonder you are so butt hurt by anything they propose. Did they reject you?

Smith is right.
Tourists don't want to visit him anymore.
No more bananas for Smith. 🍌

John would you also say that not paying income tax is a "tax perk" from losing your job?

freediver wrote on Jan 29^th, 2025 at 7:51am:



No need to go to stupid now just because I showed how ignorant you are 

freediver wrote on Jan 29^th, 2025 at 7:56am:

I know it's your default setting, but you were told not to go to stupid.

freediver wrote on Jan 29^th, 2025 at 9:12am:


Is deflection all you got left FD?

freediver wrote on Jan 29^th, 2025 at 7:56am:


I retired because I paid too much tax, I can maintain my lifestyle (I still make money to live from investments).

John Smith wrote on Jan 29^th, 2025 at 9:56am:


OK
FD read this.

So it's not a cunning tax perk, they simply don't want the rental income?

freediver wrote on Jan 29^th, 2025 at 11:33am:


Well they are not all the same, some might be retired and don't want the income and have parked some money in property just in case the markets fall over.

Some might waiting for zoning changes.

Some might just have a pocket buy and will use it when the time is right.

Some could be bought in a trust for the future.

Some will be speculative.

There are hundreds of reasons.

Leroy wrote on Jan 29^th, 2025 at 11:39am:



You can't say I didn't warn you

freediver wrote on Jan 29^th, 2025 at 11:40am:


Maybe reasons that you don't understand.

Personally I'm in the first box, diversity.

I have a mate who has a building he ran his printer shop in for decades but now does nothing and is waiting until he gets an offer he can't refuse. He won't rent because it makes it harder to sell. Owning a property is no different to some people from having boats, caravans, holiday homes ect, its not about the money.

freediver wrote on Jan 29^th, 2025 at 12:32pm:


you don't want to answer ehh

freediver wrote on Jan 29^th, 2025 at 12:32pm:


Depends where you are at and what amount of time you want to invest.

If you are running a business and you are making lots of profit you might buy property to lower your profit to avoid tax and pick up a asset which you can sell at a later date when your profit is not high and pay less tax.

There is a myriad of reasons to park money.

freediver wrote on Jan 29^th, 2025 at 12:32pm:


Bit of envy there.

Quote:


You didn't answer the question. You didn't even mention rental income.

If it was your money (and you had half a brain) would you actually want to forgo the rental income because you are "just parking money"? Or because you thought it was a cunning scheme to get tax perks?

Typical Greens mentality. It doesn't have to make sense if it is other people's money.

Quote:


Obviously you have to buy it to rent it out. But that doesn't actually answer the question, does it? Let me demonstrate how to give a straight answer:

If I owned a rental property, I would/would not deliberately forgo the rental income because...

This is my answer:

If I owned a rental property, I would not deliberately forgo the rental income because I am not an idiot.

Would you like to have a go?

freediver wrote on Jan 29^th, 2025 at 2:21pm:


What arrogance.

My wife and I worked our butts off to be in a position we could have spare money and back up if required. We have done our work and do not wish to keep trying to get every penny we can. We are happy to just have our money parked somewhere and not have to worry anymore.

And you think you can call me an idiot for doing that, well bugger you pal.

Leroy wrote on Jan 29^th, 2025 at 2:26pm:


I stand corrected. You should vote Green, so they can tax you for choosing not to rent out your property.

Most empty shops get torched.
It's the Community's way of saying "Use it or lose it"

freediver wrote on Jan 29^th, 2025 at 3:03pm:



even when you have someone on here who has told you they have done exactly what you claim no one does, you just keep digging that hole you are in ..