Australia: "Build to Rent" investment concessions

In brief

Recent changes to income tax, stamp duty and land tax rules will reduce the tax costs of "Build to Rent" projects. These changes are part of a trend in government policy to encourage "Build to Rent" developments, with a view to increasing the supply of rental accommodation in Australia. However, unrecoverable GST on development costs remains a significant cost to developers on "Build to Rent" projects.



Australia is moving quickly towards a tax regime that incentivises build to rent (BTR) developments. Though there has been some activity in the BTR space for many years, actual BTR projects have been limited in number. Tax policy settings have not, in the past, favoured BTR. This, however, is changing, with important developments in 2023, both in the sphere of income tax and State taxes to introduce new tax concessions with the object of encouraging BTR.

Historically, home ownership has been the dominant paradigm in the Australian housing market, with 66% of Australian households owning their own homes as at 2019-20.1 With a trend of declining home ownership rates in Australia as a result of rapidly increasing house prices,2 the trend is now one of the proportion of people renting their homes increasing. Against this background, policy settings are now shifting to encourage a greater supply of rental accommodation through BTR developments. These changes include:

  • Confirmation in the 9 May 2023/24 Federal Budget of previously announced income tax concessions
  • Stamp duty concessions
  • Lower land tax rates.

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