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The McGowan government has introduced new legislation to provide a 50 per cent land tax exemption for eligible build-to-rent developments.
The government has introduced the Land Tax Assessment Amendment (Build-to-Rent) Bill 2023 to the state Parliament, providing a 50 per cent land tax exemption for up to 20 years for eligible build-to-rent developments.
According to the Western Australian government, these proposed changes are part of its continued work to build the capacity of the state’s rental market and increase housing supply, with further incentives to bolster housing at the affordable end of the market funded in the 2023–24 state budget.
In order for a development to qualify for the exemption, it must contain at least 40 self-contained dwellings available for residential leases; be owned by the same owner/group of owners and be managed by the same management entity; and be completed between 12 May 2022 and 1 July 2032.
A retrospective land tax would apply if a development stops meeting criteria within the first 15 years after the exemption is granted.
Premier Mark McGowan said: “Western Australia’s rental market is under pressure at the moment and my government is committed to doing what it can to help build its capacity.
“We need more rental properties to meet future demand, and the legislation introduced into State Parliament today will help to provide this.
“It aims to develop the build-to-rent industry by offering tax relief, increasing the future supply of local rental properties.”
The introduction of the new legislation to encourage more rental property builds comes after the WA government expanded its Urban Connect Home Loan pilot for those looking to buy one-bedroom apartments.
First launched in 2022, the Urban Connect Home Loan offers borrowers the ability to purchase apartments in medium and high-density developments, close to transport hubs and in urban locations across 189 suburbs in the Greater Perth area.
The initiative is being delivered by low-deposit lender Keystart and aims to make medium and high-density living more accessible and help make property ownership easier for Western Australians.
State governments move on stamp duty
The Victorian government has announced plans to abolish stamp duty for commercial and industrial properties and replace it with an annual property tax, too.
From 1 July 2024, commercial and industrial properties will transition to the new system as they are sold, with the annual property tax to be payable from 10 years after the transaction.
Under the new system, the first purchaser of a commercial or industrial property after 1 July 2024, will have the option to choose to either pay the property’s final stamp duty liability as an upfront lump sum or opt to pay fixed instalments over 10 years equal to stamp duty and interest with a government-facilitated transition loan.
In addition, the NSW government announced it would be introducing new legislation to lift the threshold for stamp duty exemptions and bring into effect concessions for first home buyers.
Changes to the First Home Buyers Assistance (FHBA) scheme will include raising the threshold for stamp duty exemptions and removing stamp duty for first home buyers (FHB) purchasing a property up to $800,000 (previously $650,000) as of 1 July 2023.
Stamp duty concessions will still apply to purchases of property from $800,000 to $1 million (previously $650,000 to $800,000), however, first home buyers will still pay less.
[RELATED: Victoria to abolish stamp duty for property tax]
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