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As part of a string of new changes it hopes will improve the state’s housing affordability, the latest budget delivered by the McGowan government for the 2022-23 financial year outlines several incentives that will stimulate Western Australia’s build-to-rent market.
These incentives, including a 50 per cent land tax concession for new build-to-rent projects, aim to boost the available rental properties in the state as vacancy rates decline amid a steadily growing population post-pandemic.
When compared to other states, the West Australian build-to-rent sector is in its infancy; however, the state’s housing and homelessness minister, John Carey, is optimistic the land tax concession will promote build-to-rent developments within the state and, in doing so, will increase rental availability and affordability.
The move has been described by Keith Lucas, managing director of Sentinel Fund Manager Australia, as “really exciting.”
Mr Lucas firmly believes the “legislation will boost future supply across the state by reducing barriers to investment, as well as promoting greater housing diversity”. He noted that the government’s investment “comes during a time where housing supply is at a critical level across the state, with ongoing record low vacancy rates”.
Mr Lucas also opined that the government’s announcement would not just benefit the company and its current projects, including its Element 27 project in Subiaco, but will also promote and support similar projects statewide.
“We know first-hand how this bolstered support for developers within our industry could promote similar developments across the state, ultimately cementing the future supply of rental properties in WA,” Mr Lucas said.
In addition to the implementation of the land tax concession, the West Australian state government also announced further incentives that will boost rental supply within the state. This includes “enhancing the transfer duty rebate for off-the-plan apartment purchases, to help promote more investment in high density developments, including a 100 per cent rebate for apartments valued up to $500,000”.
Premier Mark McGowan said these initiatives are part of a concerted effort by his government to implement “tax reforms and incentives to boost housing and land supply to improve housing choice and build more liveable communities across our state”.
He also added that “the 50 per cent land tax concession for build-to-rent projects aims to boost future housing supply, reducing a barrier to investment, and growing the build-to-rent industry in Western Australia”.
The 50 per cent land tax concession for eligible build-to-rent developments will commence on 1 July 2023.
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