In a continued effort to support COVID-19 recovery and boost a struggling construction industry, the NSW Government will half land tax for developers of build-to-rent housing for the next twenty years.
A ‘build-to-rent’ model, which is well established in the United States and Britain, refers to a residential development scheme where the developer retains rather than sells off units and acts as the property manager. In the Government’s recent media release, NSW Treasurer Dominic Perrottet said that “Build-to-rent is popular overseas but still in its infancy in Australia, and we want to remove barriers and allow this segment of the market to grow”.
To be eligible for the land tax reduction, build-to-rent developments in metropolitan areas must be at least 50 units, unified under single ownership and include options for long tenancies. Construction of the development must also have commenced on or after 1 July 2020. It is expected that the Government will release the full eligibility criteria, as well as confirm the requirements for regional areas, in the coming weeks.
The NSW Government hopes that the build-to-rent scheme will offer renters greater choice and affordability as well as help boost certainty and jobs in the construction industry as Australia recovers from the economic impacts of COVID-19.
In addition to land tax cuts, the NSW Government is also exhibiting a new streamlined Housing
Diversity State Environmental Planning Policy to help support investment in diverse and affordable housing types, including co-living, short and long-term rentals, and social and student housing. The policy also encourages build-to-rent developments as a means of meeting NSW’s future housing needs. The Housing Diversity policy is on exhibition and inviting feedback until 9 September 2020.
The NSW Government’s full ministerial release can be viewed here.