The Victorian government has expanded its build-to-rent scheme as part of its initiative to reward investors for contributing to increase the state's housing supply.
Under the expanded scheme, eligible build-to-rent developments that are completed and operational between 2021 and 2032 will be eligible for a 50% land tax discount and a full exemption from the absentee owner surcharge (AOS).
The scheme was originally intended to end in 2040 but its expanded version now provides a full 30-year concession for projects completed by the end of 2032.
State Treasurer Tim Pallas said this move will contribute to the state's efforts in boosting housing supply and in stimulating the local economy.
"This will not only ensure Victorians have access to more rental homes and a greater range of housing options — it will create thousands of jobs as we rebuild from the coronavirus pandemic," he said.
“Home has never felt as important as in the past 20 months and this initiative will ensure Victorians have access to safe and secure rental properties for a long time in the future.”
The build-to-rent scheme was first announced in the Victorian Budget 2020-21 as part of the state's ambitious $5.3bn Big Housing Build.
In 2018, the state approved the first ever build-to-rent development, which was a 60-level apartment block on City Rd, Southbank.
"Encouraging BTR will increase the supply of new, large-scale housing for longer-term renting. It can grow our stock of affordable and social housing, expanding housing choices for Victorians," Mr Pallas said.
The state green-lit the construction of what could be Australia’s biggest build-to-rent project, which is soon to rise in Melbourne’s South Yarra.
New policy on windfall gains tax
The Victorian government also recently announced the presentation of the windfall gains tax into the Parliament.
Announced as part of the Victorian Budget 2021-22, the tax policy will see the total value uplift from a rezoning decision be taxed at 50% for windfalls of above $500,000, with the tax phasing in from $100,000.
This will ensure that most land holders of rezoned land would not be affected.
Residential land will be exempted from the tax, including those used for holiday homes and investment properties.
Proceeds from the tax will be used to fund services and infrastructure to Victorian communities.
"We want to ensure Victoria has a fairer tax system, with revenue from the windfall gains tax going back into Victorian schools, hospitals and public transport," Mr Pallas said.
Photo by Artem Beliaikin on Unsplash.
