T
he Real Estate Institute of Victoria's proposed land tax reforms aim to ease the burden on rental providers, but some landlords are pointing fingers at real estate agents. They claim that agents' tactics are exacerbating the state's housing crisis by discouraging long-term leases.
Landlord Jenny from Wangaratta is one such critic. She believes that agents are more interested in collecting commission than in helping landlords retain good tenants. "They're culpable," she says bluntly. "I've seen them actively discourage long-term leases, and it's all about the money."
Jenny recounts a personal experience where her real estate agent refused to help her secure a two-year lease for her tenants. She suspected that the agent was motivated by the potential loss of an annual re-signing fee, which can be as high as $400.
The REIV's proposal includes discounts on land tax for longer leases – 10% for three years, 20% for five years, and 45% for 10 years. However, some agents are skeptical about the benefits of long-term leases. Scott Petrie from Trevor Petrie Real Estate in Ballarat says that while he's happy to offer two-year leases, anything longer might cause problems.
Tenants can become harder to evict if issues arise during a longer lease period, and it's difficult to predict what either party may want or need in the future. Petrie suggests that two or three years is a reasonable maximum for a lease term.
In Ballarat, landlord Emma is struggling to keep up with her land tax bill, which has increased by over $1,000 in just one year. She's had to raise her tenant's rent twice already and is hesitant to do so again. The REIV's proposal could help alleviate some of this pressure, but Emma believes that real estate agents need to be part of the solution.
REIV chief executive Kelly Ryan points out that longer leases are common in other countries, including Europe, where they often come with shared maintenance responsibilities between landlord and tenant. He suggests that a program tied to CPI or a flat annual increase could help stabilize rent prices and encourage long-term leasing.
