REIWA welcomes State Government tax concessions for build-to-rent developments

REIWA CEO Cath Hart has welcomed new legislation providing a 50 per cent land tax exemption over 20 years for eligible build-to-rent projects.

“Build-to-rent is seen as an innovative, contemporary solution to get more supply into the market and this incentive by the McGowan Government will reduce costs and encourage much-needed development in this space,” Ms Hart said.

“WA is in the midst of a rental crisis and any steps to build more homes, particularly more affordable homes, is very welcome.

“It won’t solve the problem overnight but it is a move in the right direction and will help WA to meet future demand as population growth continues.”

The State legislation followed tax concessions announced in the Federal Budget last week.

“The Federal Government will increase the tax rate for the annual capital works tax deduction (depreciation) to 4 per cent for build-to-rent developments,” she said.

“It will also reduce the final withholding tax rate from 30 per cent to 15 per cent, on eligible fund payments from managed investment trust (MIT) investments starting 1 July 2024.

“These measures should encourage new builds and increase housing supply over time.

“It’s also important to have a stable regulatory environment for the rental market to attract and retain property investors both large and small.

“The ongoing debate over rental reform makes investors nervous about keeping their investment property or entering the market.

“Since the recent talk of rent freezes, I’ve been told by a number of investors that they would sell their properties if it happened here.

“I’ve also heard feedback from other states of large investors shelving build-to-rent projects after hearing suggestions of rent freezes.”