The government is offering investors a hefty tax incentive to boost the supply and construction of build-to-rent rental housing across the country.
According to a joint release from Treasurer Jim Chalmers and Housing Minister Julie Collins, this push towards build-to-rent investments will be a key player in constructing the National Housing Accords 1.2 million new homes within the next five years, starting from 1 July 2024.
Chalmers and Collins pointed to industry estimates which predict that build-to-rent investments could “make an important contribution to achieving this national target” by providing an additional 150,000 rental homes over the next decade.
“This is all about more homes for home buyers, more homes for renters and more homes for Australians who are doing it tough,” they said in the release.
“For a long time, we haven’t been building the homes that Australia needs and the former government wasted nearly a decade in office while these problems only got worse.”
With the proposal arriving in the wake of a recent report from Master Builders Australia predicting the Accords will fall 110,000 homes short by 2029, the latest incentives could be the saving grace that pushes Albo’s ambitious housing plan over the finish line.
Tax incentives for the build-to-rent sector
Build‑to‑rent developments are specifically designed to be rented rather than sold to individual buyers. It’s a model that has seen great success overseas in recent years, attracting billions of dollars from investors in the UK and the US and rapidly increasing housing supply in a short span of time.
With Australia caught in the grips of a similarly dire housing crisis, Chalmers and Collins hope to replicate that same success here on home soil.
The proposed tax incentives will apply specifically to build-to-rent projects consisting of at least 50 apartments or dwellings, which must be made available for rent to the general public.
These projects must maintain single ownership for a minimum of 15 years, with at least 10 per cent of the units designated as affordable housing options.
According to the joint release, incentives apply to eligible new projects that began construction after the policy was announced in last year’s budget.
Additionally, the legislative proposal is set to function independently of any state or territory-specific measures aimed at supporting the build-to-rent sector.
“The Albanese Government has committed more than $25 billion in new housing investments over the next decade and will continue to work closely with all levels of government to ensure more Australians have a safe, secure and affordable place to call home,” Chalmers and Collins said in their statement.
“We have a plan to kickstart the construction of more homes, to attract more institutional investment, to cut red tape and planning hurdles, to help more Australians into home ownership, to support renters, and to help those who need a safe home the most.”
