Insights

Australia: Draft Legislation on Build-to-Rent Measures

Editorial Team 17 May 2024

An analysis by Corrs Chambers Westgarth, Taxand Australia

The Australian Treasury has recently released exposure draft legislation for build-to-rent (BTR) income tax concessions, first announced in the 2023-24 Budget.

The proposed measures include:

• Increasing the Division 43 capital works deduction rate from 2.5% to 4%.
• A reduction in the managed investment trust (MIT) withholding rate on rental income from eligible BTR investments from 30% to 15% during a 15-year compliance period.

To qualify, developments must consist of 50 or more residential dwellings, all owned by a single entity for at least 15 years and at least 10% of dwellings must be available as affordable tenancies. If a development fails to meet eligibility conditions, tax concessions will be reversed, and a “BTR misuse tax” will be imposed.

Tax experts from Corrs Chambers Westgarth, Taxand Australia, have published a full analysis of the legislation along with eligibility criteria here.

Article tags

Australia | Real Estate Tax | Tax | Tax Policy