Incentives to increase the supply of housing

On 28 April 2023, the Australian Government announced it would provide incentives to increase the supply of housing, by:

• reducing the withholding tax rate for eligible fund payments from managed investment trusts (MIT) attributable to residential build-to-rent projects from 30% to 15%. This measure will apply from 1 July 2024 for income attributable to newly built build-to-rent projects. Currently, foreign residents from an information exchange country are subject to a final MIT withholding tax rate of 30% for income attributable to a residential property, including build-to-rent projects.
• increasing the capital works tax deduction depreciation rate for eligible new build-to-rent projects from 2.5% to 4% per year. This measure will apply to projects where construction commences after the Budget (9 May 2023) and will shorten the period that construction costs of eligible buildings are depreciated from 40 to 25 years.

These measures are not yet law.

For more information, see the Prime Minister of Australia media release Meeting of the National Cabinet – A Better Future for the FederationExternal Link, 28 April 2023.