From 1 January 2025, owners of eligible build to rent developments may make a choice for their development to access the tax incentives. To make a choice, they must lodge the approved form with the Commissioner.
This measure is now law.
On 28 April 2023, the Australian Government announced tax 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 active build to rent developments from 30% to 15%.
- This incentive will be open to developments irrespective of when construction commenced.
- From 1 January 2025, foreign residents from an information exchange country are subject to a final MIT withholding tax rate of 15% for income and gains attributable to a residential property, including build to rent developments.
- increasing the capital works tax deduction depreciation rate for active new build to rent developments from 2.5% to 4% per year.
- This incentive is open to developments where construction commenced after 7:30 pm, 9 May 2023 and will shorten the period that construction costs of eligible buildings are depreciated from 40 to 25 years.
For more information see:
- Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024External Link
- Capital Works (Build to Rent Misuse Tax) Act 2024External Link
- Ministers announcement: The Hon Dr Jim Chalmers MP Treasurer - Build‑to‑rent bill paves the way for the construction of 80,000 homesExternal Link