The Property Council of Australia has today welcomed the Australian Government’s announcement to lower the Managed Investment Trust withholding tax rate from 30 to 15 per cent for build-to-rent housing projects.
The Property Council has championed these public policy reforms for many years as an essential part of addressing our growing national housing supply deficit.
A recent study by EY, commissioned by the Property Council, showed levelling the withholding tax rate, in line with investment in other property asset classes, could create an extra 150,000 Australian homes over the next decade.
Property Council Chief Executive Mike Zorbas said the move will breathe life into this vital asset class, unlocking desperately needed supply through a new form of housing.
“Today’s announcement is a strong step toward addressing and reversing Australia’s growing housing shortage,” Mr Zorbas said.
“More supply means downward pressure on the cost of renting and buying homes and will offer more housing choices and affordable options at a time when we desperately need them.
“Build-to-rent housing, like purpose-built student accommodation and retirement living, is a positive part of the national housing equation and provides tenants with long-term security of tenure, superior amenities and professionally managed properties,” he said.
It is understood, and subject to confirmation, the new tax rate will apply to all new build-to-rent housing projects commenced after the date of this year’s federal budget, ensuring any project that finalises construction between 9 May 2023 and 1 July 2024 will be eligible to claim the rate from 1 July 2024 and onwards.
“The earlier these changes come into force the earlier additional investment can commence and we look forward to future consultation with the government to bring forward these arrangements with states and territories as efficiently as possible,” Mr Zorbas said.
“The next public policy improvement will be to introduce an incentivised tax rate of 10 per cent for Affordable ‘Key Worker’ Housing (rent at 20 per cent below market) to domestic and international investors that incorporate supply of affordable dwellings within their build-to-rent communities,” he said.
The Property Council also welcomed the National Cabinet’s commitment to plan for increasing housing supply and affordability over the next six months.
The Property Council continues to advocate for the passage of the Housing Australia Future Fund and related housing legislation in the Senate.