The Victorian Government has introduced Build to Rent Concessions in the form of a 50% reduction in land tax and an exemption from the land tax Absentee Owner Surcharge.
Build to Rent (BTR) projects which will in turn ensure Victorians have access to more rental homes and a greater range of housing options.
BTR Benefits will be introduced to promote Victorian BTR projects. The BTR Benefits will comprise of:
A 50% reduction in land tax for eligible BTR projects;and
Exemption from Absentee Owner Surcharge for eligible BTR projects.
Both benefits will be available for a period of up to 30 years.
The concessions will only apply to eligible BTR developments. A BTR development is one or more buildings that are constructed or substantially developed for the purpose of providing multiple dwellings for lease under residential rental agreements.
An eligible BTR development must meet the following requirements for a continuous period of 15 years from the occupancy date:
It must provide for at least 50 self-contained dwellings
It is owned by the same owners
It must be managed by a single management entity (except affordable housing or social housing projects)
It must be suitable for occupancy after 1 January 2021 and before 1 January 2032; and
It must be rented or available for rent under a residential rental agreement. The tenant must have an option of at least a 3 year fixed term rental but may elect a shorter term.
The owner of the land must apply to the Commissioner for the BTR Benefits.
A land owner must notify the Commissioner within 30 days if it has claimed a BTR Benefit and there is a change in circumstance that results in the land no longer being eligible. The land owner may then be liable for BTR special land tax which effectively claws back the concessions for all prior years together with interest.
The BTR benefits are largely similar to the concessions introduced in NSW with one noticeable difference being that the Victorian concessions do not provide an exemption from the Foreign Purchaser Additional duty. Instead, landowners will need to specifically apply for an exemption for this additional duty if applicable.
What action needs to be taken?
The BTR concessions are only available to eligible projects. A review should be undertaken of proposed projects to determine eligibility.
How SW can help
Our team can assist with this review and the application to the Commissioner. Reach out to one of our property experts below for support.
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