Major move to promote more build-to-rents

LEGISLATION passed in the Western Australian parliament this week will significantly boost the number of build-to-rent projects in the state.

The parliament passed legislation to increase the land tax exemption for eligible build-to-rent developments from 50 per cent to 75 per cent.

The change delivers the most generous land tax exemption for build-to-rent developments in the nation, growing the supply of long-term rental housing in Western Australia.

This will support the build-to-rent industry by reducing barriers to investment, helping to accelerate new build-to-rent projects and increase the supply of long-term rental housing.

The increased exemption will apply to developments that become operational between 2025-26 and 2029-30, and will be available for a 10-year period following completion.

After this, the existing 50 per cent exemption will continue to apply for a further 10 years.   

To be eligible, developments must meet existing criteria, including providing at least 40 self-contained dwellings available for a minimum of three-year residential leases.

Expansions of existing build-to-rent developments that become operational between 2025-26 and 2029-30 can also qualify for the increased exemption.

Consistent with the existing exemption, retrospective land tax will apply where a development ceases to meet the eligibility criteria within the first 15 years, encouraging investors to maintain long-term rental supply.

WA treasurer Rita Saffioti said the exemption continued the government’s “commitment to accelerating housing supply across Western Australia”.

“These changes will help get more build-to-rent projects off the ground, so we can deliver more affordable rentals and housing choice,” she said.

Finance minister David Michael said the passing of this legislation “is a major milestone in delivering more housing for Western Australians”.

“The government is doing everything it can to accelerate housing supply and build-to-rent developments will play a key role in supplying more rental options,” he said. 

Housing and works minister John Carey said: “We are funding a record number of build-to-rent projects and these tax changes will support more of these developments to get off the ground.”