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A proposal to introduce a so-called “lazy place tax” on vacant commercial buildings has ignited a debate between policymakers and peak bodies ahead of a September cultural tax summit.
The plan, championed by City of Sydney councillor Jess Miller, calls for financial penalties on unused commercial spaces and tax credits for those repurposed for creative industries.
Miller, a former deputy lord mayor and member of “Team Clover”, has argued that long-term vacancies damage community life and high streets, while a more compelling incentive is needed to drive landlords into action.
“Everyone talks about the need to activate spaces to enliven local high streets. The opposite of active is lazy. It captures that frustration of looking at a beautiful building that sits there empty and lifeless. We need a way to encourage these spaces being used that is more compelling than overt land-banking, where money is parked in Sydney property,” the Sydney Morning Herald quoted of the councillor.
The push comes as NSW Arts Minister John Graham prepares to convene a cultural tax summit in September, focused on how tax policy can strengthen the state’s creative industries.
The Property Council of Australia has swiftly rejected the proposal, warning that vacancy taxes risk worsening an already complex leasing environment and burdening the market with additional red tape.
“Vacancy taxes ignore the complexity of commercial leasing and risk creating market distortions and more red tape. Incentives, not penalties, are what will unlock new space for creatives,” Property Council NSW executive director Katie Stevenson said.
She argued many buildings remain unoccupied for legitimate reasons, including compliance upgrades, heritage or fire remediation, change-of-use applications or pending development approvals, meaning a punitive approach risks unfair consequences.
“Buildings often sit empty for good reasons – compliance upgrades, heritage or fire remediation, change-of-use applications or a forthcoming development assessment. Punishing vacancy won’t solve the problem – but providing the right incentives could create momentum,” Stevenson said.
Instead, the council has called on government to consider land tax exemptions or rebates for landlords leasing at affordable rates to creative tenants, alongside creative enterprise zones and Creative Land Trusts.
The September roundtable will test whether a “lazy place tax” can gain traction, or whether property industry resistance will push the government towards incentive-based reform instead.
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