I haven’t read anything on here about the proposed abolition of LAFHA for foreigners and the impact it will have on the rental market? The govt is planning on abolishing LAFHA for non-Australian residents from 1 July this year. (And tightening it for Aussies as well)
LAFHA for non-Aussies is a huge issue for thousands of medium-high salary workers in the capital cities, but particularly Sydney and Melbourne.
To put it in perspective, a pom working in Sydney for an investment bank, law firm or accounting firm, earning say $200k and paying $2,000 a week in rent actually only pays rent of about $1,150 pw, given the LAFHA payment. Suddenly, from 1 July their rent will almost double.
I know $2k pw rent on a $200k salary seems unlikely, but LAFHA makes it possible for a lot of professionals, given that the govt effectively pays for almost half of their rent. So once LAFHA is taken away from them, they’re likely to either leave Australia or move to cheaper digs.
Unfortunately nobody knows how many tenants receive LAFHA, so there’s no way of knowing the size of the impact, but I personally know of several expats who are planning on downsizing from their current houses and apartments, so I can only imagine there’ll be thousands across Australia who’ll be looking to downsize from 1 July, as their leases expire.
So terrible news for the high end rental market but good for demand in the $400-$800 pw range?
Cheers
Jonathon
LAFHA for non-Aussies is a huge issue for thousands of medium-high salary workers in the capital cities, but particularly Sydney and Melbourne.
To put it in perspective, a pom working in Sydney for an investment bank, law firm or accounting firm, earning say $200k and paying $2,000 a week in rent actually only pays rent of about $1,150 pw, given the LAFHA payment. Suddenly, from 1 July their rent will almost double.
I know $2k pw rent on a $200k salary seems unlikely, but LAFHA makes it possible for a lot of professionals, given that the govt effectively pays for almost half of their rent. So once LAFHA is taken away from them, they’re likely to either leave Australia or move to cheaper digs.
Unfortunately nobody knows how many tenants receive LAFHA, so there’s no way of knowing the size of the impact, but I personally know of several expats who are planning on downsizing from their current houses and apartments, so I can only imagine there’ll be thousands across Australia who’ll be looking to downsize from 1 July, as their leases expire.
So terrible news for the high end rental market but good for demand in the $400-$800 pw range?
Cheers
Jonathon
