Property Council of Australia recently expressed its approval of the introduction of the government’s legislative package on stapled structures and managed investment trusts, saying that the move could pave the way for greater certainty around the rules for institutional investment in real estate.
The Property Council also noted that these Bills can benefit millions of Australians’ retirement savings, and believed passing this legislation as quickly as possible was essential.
The final package brought to Parliament is nearly consistent with the draft legislation provided earlier this year, and strongly supports the existing policy framework for ‘traditional’ real estate classes.
In addition, it allows Build-to-Rent housing to be included within a managed investment trust, although with higher withholding tax rates. The impact of withholding taxes on agricultural land held for future development purposes has also been clarified.
Consequently, Property Council Chief Executive Ken Morrison is pushing for immediate formalisation of the bill. “The priority now must be passage of the bills to provide the long-term certainty which is the most important thing for property funds and investors,” he said.
“The review of stapled groups has now been underway for 18 months and it is important that the market has resolution of these issues.
“While noting the bills have been referred to a Senate committee for inquiry, we will be encouraging their adoption as they stand to avoid further uncertainty and delay.”
The council agreed, saying that “[t]he Government’s approach recognises that the existing stapled structure arrangements are the best way to promote the interests of almost 15 million Australians who have investments in commercial real estate through their super funds.”
