The New South Wales government has introduced new legislation into Parliament which, if passed, would stimulate increased investment in purpose-built rental housing and help address affordability concerns by driving prices down through providing a 50% discount on land tax to developers who invest in built-to-rent schemes.
According to Urban Taskforce CEO Tom Forrest, build-to-rent means an entire building is designed to be rental accommodation and owned by one entity rather than split into individual units and sold to buyers through a strata plan. He explained this proves an attractive option for institutional investors and is popular throughout England and North America.
“The number one reason property prices in Sydney are so high is the of a lack of supply. This applies to the rental market as well as the sales market for houses and apartments,” Forrest said, adding that investing in build to rent schemes will help create more choice in living accomodations for consumers who are not able or not interested in buying a home.
Additionally, Urban Taskforce has been campaigning for NSW to do away with its foreign investor surcharges on residential developments, claiming the taxes are “punitive” and prevent investment in a market which desperately needs stimulus and funding.
“[This week’s] announcement demonstrates that on tax matters, the NSW government has been listening,” Forrest said.
“Foreign investor surcharges will be exempt for the ‘build-to-rent’ market provided construction begins after July 1 this year.”
“The Urban Taskforce has been at the forefront of calling for taxation concessions to encourage more investment into build to rent. [This] announcement does just that and is very welcome news for renters and for jobs.”
Legislation for the land tax cuts is to be introduced into the NSW Parliament this week.
“Urban Taskforce calls on all political parties to pass this legislation through the Parliament as soon as possible, in the interests of investment, jobs and lower prices for renters across NSW,” said Forrest.