Build to Rent Housing Reforms in NSW welcomed

Renters will have more choice and the property industry will be transformed by a raft of planning and tax reforms that will make build-to-rent housing a reality in NSW.

Treasurer Dominic Perrottet and Minister for Planning and Public Spaces Rob Stokes today finalised changes to planning and tax policies that will boost the economy and create greater choice for renters.

“We’ve levelled the playing field so build-to-rent developments will see similar overall amounts of State tax as comparable build-to-sell developments,” Mr Perrottet said.

“To encourage more build-to-rent housing there will be a discount equivalent to at least a 50 per cent reduction on land tax and an exemption from foreign investor surcharges for eligible build-to-rent developments until 2040.

As part of the guidelines, eligible build-to-rent properties must offer tenants a range of lease term choices, including a genuine option to enter into a fixed term lease of at least three years.

The planning policy sets out new provisions for build-to-rent housing, and to be eligible for the tax concessions, a build-to-rent property must meet criteria set out in legislation and in the Treasurer’s Guidelines.

Eligibility criteria for the tax concessions include that a property has at least 50 dwellings used specifically for the purposes of build-to-rent, is held under unified ownership and is not subdivided in the first 15 years of receiving the concessions.

The guidelines will support the Chief Commissioner of State Revenue in determining eligible build-to-rent developments.

The build-to-rent planning changes are effective immediately and will be included in the new consolidated Housing State Environmental Planning Policy (SEPP), which will be finalised in the coming months.

The Property Council welcomed the announcement. “Build-to-rent delivers much needed housing supply, is good for renters, keeps jobs in construction and is also great for our economy,” NSW Executive Director Jane Fitzgerald said today.

Of course, these concessions are useful and will assist to develop the Built to Rent sector, however more work on levelling the playing field in the Federal tax system is required to generate substaintial investment in the sector.