One stroke of a pen puts build to rent at risk
Draft affordable housing legislation released yesterday risks stalling the emerging new build to rent housing sector before it starts.
“Build to rent is a potential game changer in resolving the housing affordability challenge”, said Ken Morrison, Chief Executive of the Property Council of Australia.
“We understand the Government’s desire to ensure the capital gains tax concessions announced in the Budget are targeted towards affordable housing.
“But the unintended consequence of the draft legislation is to completely close down the capacity for Managed Investment Trusts (MITs) from investing in build to rent accommodation.
“This risks stalling build to rent before it starts.
“The answer to Australia’s housing problem is more supply. Build to rent has the potential to harness new investment that could deliver tens of thousands of new homes and provide a greater diversity of choice for renters.
“In the US, UK, Canada and elsewhere, a scaled-up pipeline of at-market rental can help pull forward more investment in affordable rental housing.”
Mr Morrison said if the government had concerns about the scope of MIT investment in housing, or about how MITs interacted with the property market, then the industry is willing to sit down with the government and work through those details.
“We need to work through solutions to ensure CGT concessions for affordable housing go where they are intended, but without preventing the emergence of genuine choice for renters via build to rent.”
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