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Build-to-rent tax concessions

Build-to-rent tax concessions

In April 2024, Treasury released for comment exposure draft legislation (see here) seeking to introduce income tax concessions for Build-to-rent property developments to give effect to a Federal Budget announcement made on 9 May 2023.

The proposed concessions consist of a capital works deduction rate of 4% per year and a reduced withholding tax rate of 15% for foreign investors in Managed Investment Trusts for distributions of qualifying net rental income. Eligible build-to-rent developments are those consisting of 50+ dwellings held by a single entity for at least 15 years with the dwellings being leased out in accordance with certain requirements (e.g. offered for lease for at least 3 years with a component of the development meeting “affordable dwelling” requirements).

Pitcher Partners made a submission to Treasury outlining our concerns with the policy settings such as the affordable dwelling requirements and the lack of withholding tax concessions in respect of capital gains. We also included a list of technical deficiencies in the draft legislation and areas that require further clarification.

You can read our submission below.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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