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March 17, 2017 | Australia Housing Insanity: Tent Outside, Full Use of Apartment, Cheap, $90 Per Week

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Every time you think things in Australia cannot get any more ridiculous, you are proven wrong.

Housing has skyrocketed beyond belief and so have property taxes and rent. Homeowners now stack bunk beds and rent out 4-person shared rooms for $120 a week.

Those who prefer their own private sleeping space, with full use of the associated apartment, can lease a tent out back for only $90 a week.

News AU reports Renters resort to paying for tents and shared rooms due to the high cost of living.

People have been so desperate for cheaper rent, they have even resorted to paying about $100 a week for tents set up in backyards and on balconies, that were advertised on Gumtree.

Others share a small living space, with a number of curtains strung up so each housemate can have their own space.

Renters are also sharing bedrooms, with one ad on Gumtree offering a bed in a room with three others for $120 a week.

There is a rental crisis in Melbourne and young people are either forced to stay at home or move into small share houses.

But it’s about to get even harder and landlords are about to pass on extra costs to their tenants.

According to the Herald Sun, landlords will be forced to charge more rent due to expensive land tax bills.

Land Tax Calculator

I used the Victoria Land Tax Calculator for an absentee landlord and determined that the owner of a $1,000,000 property would pay $17,975.00 per year in land taxes.

If that is the full amount of tax, then those down under have it easy.

For a home valued at $450,000 or so, we pay over $14,000 per year for an owner-occupied non-rental home in McHenry County, Illinois.

I have not determined the Melbourne tax for renting out a room in an otherwise owner-occupied home. I expect someone from down under can help me out.

I wonder: How many owners are renting out space and not paying taxes?

Bargain Basement Pricing

Bargains are where you find them, and clearly in the eyes of the beholder.

Mike “Mish” Shedlock

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March 17th, 2017

Posted In: Mish Talk

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