Sunday 10 December 2023
MEDIA RELEASE
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.
Over the past 50 years, overseas investment has built and continues to build the best parts of Australian cities and towns.
Property Council Chief Executive Mike Zorbas welcomed the announcement noting high foreign investment fees are a disincentive for global investment that is needed to achieve our 1.2 million homes by 2029 housing target.
“Build-to-rent has the potential to create 150,000 homes over the next decade, but the settings must be right,” Mr Zorbas said.
“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.
In addition to this positive step, the Property Council notes that more settings need to change to unlock the potential of global institutional investment into new Australian housing, including critical areas where governments can save money through service aggregation such as retirement living communities and purpose-built student accommodation.
“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,” Mr Zorbas said.
“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.
“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,” Mr Zorbas said.
ENDS
Media contact: Rhys Prka | 0425 113 273 | [email protected]
Ellie Laing-Southwood | 0416 007 830 | [email protected]