Build-to-rent development will be accelerated under new tax concessions that have finally been waved through the Federal Parliament in its final sitting week of 2024.
The reform could unlock an additional 80,000 new apartments in the next decade, according to EY modelling, which Property Council of Australia chief executive Mike Zorbas said would provide renters with more security and capacity to achieve savings goals.
“Of these, 8000 are affordable homes and 1200 would become available to rent in the near future,” Zorbas said.
“This is the largest induction of investment in new rental homes by a federal government in recent memory.
“Housing Minister [Clare] O’Neil has championed this rental supply. Her pragmatic approach has delivered a solution that the property, community housing and social services sectors welcome as a positive first step.”
O’Neil said that although build-to-rent was not a silver-bullet solution to the housing crisis, it would add to supply.
“I’m confident that this is a really important part of the answer to our housing problems in this country, not perfect, because nothing in life ever is but a good step forward for us,” O’Neil told the media.
The Managed Investment Trust (MIT) withholding tax concessions will be tied to five-year minimum leases, the provision of 10 per cent affordable housing and the scrapping of no-cause evictions.
Melbourne build-to-rent developer Local: Residential welcomed the news of the amended legislation and tax concessions.
“We are incredibly excited to see the Federal Government announcement for MIT made in perfect harmony with our impact housing model,” the developer said in a statement.
“When Local: announced our approach to build-to-rent in 2021, we set out to prove that impact housing and market housing can coexist as one. Now, with the announcement made today, we look forward to seeing it spread throughout the sector.”
