Foreign owners to be taxed for Australian homes empty for more than six months

Foreign owners will be slugged with an annual fee if their property is left vacant for six months or more after legislation cleared the Senate.

Deductions investors can claim on residential properties will also be limited under the new measures announced in the May budget, which passed the upper house on Wednesday.

The vacancy charge, which will be in line with fees foreigners pay to buy an Australian property, is designed to increase the number of homes on the rental market.

Local investors will no longer be able to claim travel costs to travel to properties, and plant and equipment tax deductions will be restricted.

Labor supported the bills, despite arguing they would do little to make housing more affordable.

But the government faces a tougher time passing the main part of its housing affordability plan, which would allow first-home buyers to save for a deposit through their superannuation.

Labor and the Greens are opposed to the scheme, meaning the government will need to secure crossbench support.

A recent report showed that the Melbourne City Council area had over 2500 properties vacant, with the estimation of empty properties based on water usage.

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Meanwhile, the recent 2016 census results revealed that there are 200,000 more homes vacant across the country than there were 10 years ago.

AAP (With Domain)