Super Housing Partnerships, a specialist affordable housing fund manager, welcomed the recent budget announcements by the government which aim to encourage the development of more build-to-rent housing by offering new incentives to encourage the supply of housing through:
• reducing the withholding tax rate for eligible fund payments from managed investment trusts attributed to newly constructed build-to-rent developments from 30 to 15 per cent, and
• increasing the capital works tax deduction (depreciation) rate from 2.5 per cent to 4 per cent per year, increasing the after tax returns for newly constructed build-to-rent developments
Super Housing Partnerships CEO Ms Carolyn Viney “The Government understands Australia’s housing crisis is in part a supply issue and has listened to the industry about what we see as some of the barriers to scale investment.”
“These incentives are an important step to attract institutional capital and will assist in addressing the critical shortage of good quality, well located housing for those who need it.” Ms Viney Said.
These initiatives build on the government's National Housing Accord that brings together industry participants, providers of capital and policy-makers who all share an ambition to address the housing needs in Australia. Super Housing Partnerships supports these measures, together with the ongoing GST concession provided to Community Housing Providers.
The incentives will apply to build-to-rent projects consisting of 50 or more apartments or dwellings made available for rent to the general public. The dwellings must be retained under single ownership for at least 10 years before being able to be sold and landlords must offer a lease term of at least 3 years for each dwelling.
The reduced managed investment trust withholding tax rate for residential build-to-rent will apply from 1 July 2024.
The government has announced that they will undertake a consultation process to guide the implementation. “Super Housing Partnerships looks forward to working with the government to inform the implementation of these measures, we are in a unique position to offer a view on the needs of investors, developers and importantly, the end user.” said Ms Viney.
Super Housing Partnerships has been advocating for the changes announced tonight to encourage more investment in the sector.
"By prioritising these incentives, the government is sending a clear signal that it recognises the important role that build-to-rent housing can play in addressing Australia’s housing crisis. We look forward to working with more developers and investors to make this vision a reality."