The Property Council says it endorses the Federal Government’s support to boost build-to-rent projects nationwide, but warned against what it describes as an “avalanche of taxes” on new builds.
The Federal Government believes high foreign investment fees are deterring global investment within the sector. If application fees were moved to the lowest appropriate commercial level, the BTR class could play a key role in achieving the National Housing Accord’s target of 1.2 million homes by 2029.
Property Council welcomes federal build-to-rent housing support - warns National Cabinet about rolling avalanche of taxes on new construction
Moving foreign investment application fees for build-to-rent projects to the lowest appropriate commercial level will boost the investment appeal of new rental housing supply that offers well-located, secure, customer-led and community-oriented housing, according to the Property Council of Australia.
“Build-to-rent has the potential to create 150,000 homes over the next decade, but the settings must be right,” says Property Council Chief Executive Mike Zorbas.
“To give people the full spectrum of affordable housing choice we need to tap into institutional investment and today’s announcement is an important step.
“Encouraging overseas investment to go into new assets makes good sense,” he said.
Zorbas believes the government can reduce costs via an increase of the retirement living and student accommodation supply.
“In a highly competitive global market for capital, the National Cabinet needs to think holistically about the tax settings that can help or hinder investment in creating more homes for Australians,” he continues.
“Cutting against the investment grain are those outright deterrents to long term overseas investment in our cities and housing, such as looming Federal ThinCap changes and increasing Foreign Investment Review Board fees.
“The Productivity Commission has rightly characterised such fees as taxes on new investment.
“Despite improvements in the government’s drafting, federal ThinCap changes will still impact the genuine business activities of property trusts, make access to debt more difficult and reduce the allocation of global capital available to build new homes.
“That is before you account for thoughtless but popular state foreigner taxes on new homes and State Treasurers’ devil-may-care attitude to investment-stunting quarterly tax hikes on property.
Zorbas says that the current state of flux will provide further barriers to an upturn in housing supply.
“It is clear that changing property investment rules week in and week out, evident most recently in taxes rushed through by the Victorian and NSW governments, will prevent us reaching our 1.2 million homes target.
“We will continue to work with all levels of government to maximise the number of homes being built across the country in 2024.”
