Developer tax cut good news for renters

T H E A U S T R A L I A N . C O M. A U 03:46
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NSW Treasurer Dominic Perrottet announced developers would see their land
tax slashed in half in a bid to encourage new developments focused on
renting, not selling. Picture: AAP/Bianca De Marchi

 By HANNAH MOORE
 NCA NEWSWIRE
 7:41AM JULY 30, 2020

Renters will be given more security for long leases and more choice under a
new government scheme designed to increase the number of properties on the
market.

Developers planning to “build to rent” will have 50 per cent slashed off their
land tax until 2040 in a bid to encourage the practice, which has taken off
overseas.

The tax cut is similar to what developers who are building to sell receive, but
the government hopes this new scheme will provide more housing options,
greater surety for long-term renters, boost construction and support jobs
during the COVID-19 recovery.

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Under the new program, those who develop land for the purpose of renting out
the homes will be eligible for the same tax breaks as those developing to sell.

NSW Treasurer Dominic Perrottet said the government was hoping the market
for these projects would grow under more the soon-to-be more favourable
conditions.

“Renters benefit through greater choice and because the focus is placed on
them, rather than just geared towards property owners, it has an added benefit
of encouraging better quality rental properties and much longer-term leases,”
he said.

“This will provide further confidence, boost the housing construction industry,
create more options for investors and builders of developments and ultimately
more housing options and security for tenants.”
Renters will receive a boost from a new government scheme encouraging
developers to rent homes in their buildings, not sell them.

To be eligible, construction must not have begun before July 1, 2020, and the
projects must provide purpose-built rental units, be managed under unified
ownership and include options for longer leases.

Developments in metropolitan areas must have at least 50 units, while criteria

for regional developments is still being considered.

The program, which also includes an exemption from foreign investor

surcharges, will be in place until 2040, and full eligibility criteria will be
announced in the coming weeks.

There will also be a new Housing Diversity State Environmental Planning

Policy, which will include development standards for build-to-rent
developments.

Planning Minister Rob Stokes expects the change will also help support
investment affordable and social housing.

“Not only do we need different types of housing — such as detached, high-

rise and missing-middle types — we need different tenures of housing — such
as affordable and social housing, short and long-term rentals and owner-
occupiers,” he said.

“Build-to-rent provides a more direct route for investment in housing

diversity, and provides the certainty needed to build in uncertain times.”

The policy is on exhibition for feedback until September 9.