- Victorian government announces additional incentives to the 50% land tax discount
- Absentee Owner Surcharge exemption, and a full 30 year concession to projects starting before 2032
- Part of the state government's $5.3 billion Big Housing Build program
The Victorian government yesterday announced new incentives for investors to build rental properties in hopes to increase supply, improve the diversity of housing choices, and provide more long-term rental options.
Eligible build-to-rent developments (designed to be held for rental over the long term) completed and operational between January 1, 2021, and December 31, 2031, will now receive both the 50% land tax discount and full exemption from the Absentee Owner Surcharge (AOS) for up to 30 years from January 1, 2022.
Originally the government announced the 50% tax discount from January 1, 2022, with the support ending in 2040.
Now, the AOS aspect is in place, exempting land owned by an absentee owner from the 2% surcharge on land tax, as well as a full 30-year concession to projects starting before 2032.
After consultation with industry and relevant stakeholders, the Victorian government is aiming to provide more certainty for eligible developments due to be completed before January 1, 2022, so shovel-ready projects can confidently begin as soon as possible.
“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.”
Tim Pallas, Victorian Treasurer
The government said improving rental access is part of their work to ensure everyone has a safe, secure place to call home.
“This will not only ensure Victorians have access to more rental homes and a greater range of housing options, (but) it will create thousands of jobs as we rebuild from the coronavirus pandemic,” said Mr Pallas.
Big Housing Build
The support is part of the Victorian Government’s Big Housing Build program which will see a $5.3 billion investment in social and affordable housing.
Aiming to deliver over 12,000 new dwellings, the state said the investment will boost total social housing supply by 10%.
The dwellings will include both new social housing and the replacement of existing dwellings.
Rental Supply in Victoria
According to the Victorian government’s latest rental report, rent availability increased by 13.3% between June 2020 and June 2021.
Metropolitan Melbourne saw a 19.9% increase, while regional Victoria saw a 14% decrease.