Tax cut good news for renters
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.
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."
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.
Originally published as Tax cut good news for renters