ARE THERE ANY GOVERNMENT INCENTIVES AVAILABLE TO DEVELOPERS CONSIDERING BTR (BUILD TO RENT) PROJECTS IN AUSTRALIA?

With Build to Rent (BTR) the fastest-growing trend in the real estate market today, this short video by Michael Bentley from Aurient Property asks WHAT IS THE DIFFERENCE BETWEEN BUILD TO RENT AND BUILD TO SELL IN AUSTRALIA?

Australia's residential developers and investors have long favoured the build-to-sell model, where capital is tied up for a shorter period and returns are quicker and often greater.

Build to Rent assets also have a different risk profile to other asset classes, such as commercial office buildings. These differences will influence how BTR Projects will be structured and who the likely players in the sector will be.

So, are there any Government incentives available to developers considering entering this space? 

Government incentives for Build to Rent projects as at Mid 2022 (subject to change) 

New South Wales

In New South Wales, there’s a 50% land tax discount in place until 2040 for build-to-rent developments. Build-to-rents can also receive an exemption from foreign investor duty surcharges and land tax surcharges.

For more information, visit the Revenue NSW website.

Victoria

Melbourne is leading the way at the moment, with lower land costs and seemingly better planning processes, combined with a 50% land tax discount for BTR proejects giving it a competitive advantage. BTR developers can get an exemption from the absentee owner surcharge for the same period too. The foreign purchaser additional duty can also be waived if certain criteria is met.

For more information, visit Victorian Government’s Treasury and Finance website.

South Australia

From next year, the South Australian government will offer a 50% land tax discount for eligible build-to-rent projects, but the details are to be confirmed.

For more information, visit the Revenue SA website.

Queensland

The Queensland government is partnering with several private build-to-rent developments to deliver affordable rental housing through rent subsidies. Ex-gratia relief is available on a case-by-case basis.

The Queensland government is promoting build-to-rent through two government supported pilot projects, but is yet to offer any detailed state-based tax concessions.