New research shows lowering a single tax on build-to-rent (BTR) housing could protect 150,000 new homes and create an additional 10,000 affordable rental homes at no cost to taxpayers.
In this report commissioned by the Property Council of Australia, EY shows lowering the managed investment trust (MIT) withholding tax rate to 10 per cent for build-to-rent projects with an affordable housing component could accelerate the building of 10,000 affordable homes over 10 years.
The research reveals lowering the MIT withholding tax rate to 10 per cent would enable the allocation of at least five per cent of apartments in projects for affordable housing at a 25 per cent discount to market
Property Council Chief Executive Mike Zorbas said the research highlights a simple, budget neutral measure to boost national investment in affordable homes.
“This new modelling shows one cost neutral government policy improvement will throw the weight of new institutional investment behind the creation of 10,000 affordable rental homes,” he said.
The recent modelling expands on EY’s 2023 research, commissioned by the Property Council, that showed a 15 per cent managed investment trust withholding rate can result in 150,000 apartments by 2033, a change announced in the May 2023 Federal Budget.
The specifics of this budget measure are yet to be finalised, but the Property Council has warned that forced affordable housing elements at the 15 per cent tax rate for build-to-rent housing would jeopardise
those 150,000 new apartments.