The ‘ghost tax’ only applies to foreign nonresident owners. This type of ‘ghost tax’ is also used in Vancouver.
The ‘ghost tax’ doesn’t apply to Australians who leave their properties empty.
Foreign nonresidents can be easily identified by the ATO. This is because foreign nonresidents need to apply for foreign investment approval before purchasing any residential property in Australia. Foreign nonresidents already pay fees of $5000-$90,000 per property depending on its value. The ‘ghost tax’ will be an additional tax.
Water usage is just one method of assessing whether a property is vacant. However, any savvy owner could easily ask (or employ) another person to turn on a few taps in their apartment every so often to make the place appear to be lived in.
As a result I don’t think the ghost tax will achieve its desired aims of releasing more nonresident foreign owned rental properties into the rental pool.