The commencement of changes designed to implement a fit-for-purpose planning and tax regime to get build-to-rent housing off the ground in NSW have been welcomed by the Property Council of Australia today.
Property Council of Australia NSW Executive Director Jane Fitzgerald said in addition to delivering much-needed housing supply, build-to rent would keep jobs in the construction industry and provide a boost to the economy.
“Build-to-rent can offer longer-term rental tenure while also providing professional lease and facility management; all of these can improve the rental experience greatly as overseas experience has shown,” Ms Fitzgerald said.
Ms Fitzgerald said changes announced today would provide a shot in the arm for build-to-rent in NSW by providing a planning and tax framework designed specifically with the new sector in mind.
“The planning changes not only acknowledge that build-to-rent is a different housing ‘product’ to build-to-sell but also provide clear guidance to investors, developers and consent authorities.”
She added that the accompanying tax changes would also improve certainty for investors and remove disincentives that had previously held the sector back.
Ms Fitzgerald said NSW Department of Planning, Industry and Environment data released this week showed a dramatic decline in the Housing Supply Forecast for Sydney over the next five years.
“International experience demonstrates strongly that build-to-rent is exactly the right response to a cyclical downturn in housing supply so the Treasurer and Planning Minister deserve kudos for making these changes right now,” Ms Fitzgerald said.
A 2017 inquiry by the Australian Housing and Urban Research Institute found that, if implemented in Australia, the build-to-rent model could significantly improve the rental affordability issue and positively impact the homelessness problem.
As part of a raft of budget measures to boost Victoria’s housing sector in November, Victoria’s Premier Daniel Andrews announced his government would halve the land tax levied on build-to-rent developments from 2022 through to 2040.
Around the same time, Ms Fitzgerald’s Queensland Property Council counterpart Chris Mountford called on the Palaszczuk government to adopt similar measures.
“Build-to-Rent is an important component of the future of housing in Australia, and there is no shortage of companies that are lining up to invest in it,” Mr Mountford said at the time.
Ms Fitzgerald said the post-GFC experience of the US and UK showed “build-to-rent can deliver housing supply through, and out of, an economic downturn like the one COVID has delivered”.
The changes that commence in NSW from today include:
- Specific planning rules that ‘define’ build-to-rent as purpose-built housing with more than 50 dwellings that is unable to be subdivided for at least 15 years;
- A specific planning pathway for large-scale build-to-rent projects (more than $100 million) where they will be dealt with as State Significant Developments;
- Greater flexibility in some planning rules to ensure the special design and amenity features of overseas build-to-rent developments can be delivered such as a greater proportion of shared or communal spaces;
- And changes to land tax so it does not act as a disincentive to the growth of the build-to-rent sector.
