Chief Minister Andrew Barr: the ACT will need more housing to cope with its growing population. Photo: Lottie Twyford.
The ACT Government will offer subsidies and tax concessions for multi-unit build-to-rent proposals that include a minimum number of affordable rentals as part of its plan to boost housing in the Territory by about 30,000 dwellings over the next five years.
It is calling on developers, build-to-rent operators and community housing providers to provide at least 15 per cent affordable rental dwellings as part of an existing or planned build-to-rent development.
Chief Minister Andrew Barr said the affordable rental dwellings would need to be rented at less than market rent under an agreement for at least 15 years to households who met the income-based eligibility criteria.
“The request for proposal process will consider financial assistance and tax concessions for build-to-rent developments where at least 15 per cent of dwellings (and a minimum of 10 dwellings) are rented as affordable rental tenancies,” he said.
“Build-to-rent projects significantly increase the number of rentals in the ACT, and the Government is interested in further adding the number of affordable rentals available in the ACT through these developments.”
The Government has already released a block in Turner to the market as a pilot build-to-rent project with a mandatory minimum affordable rental component.
Mr Barr said the ACT’s population was set to grow from around 455,000 to 500,000 in the next five years.
The Government planned to meet this extra demand through more public housing, more social housing, more affordable rental properties, more rental properties, more urban infill developments and more greenfield developments.
“It’s the most comprehensive housing commitment in the Territory’s history with a single goal to provide more housing options for more Canberrans,” Mr Barr said.
The ACT is already grappling with a rental affordability crisis and extremely tight vacancy rates, putting extra pressure on public and community housing.
Financial assistance to proponents could be offered in the form of direct subsidy, land tax concessions, or lease variation charge (LVC) discounts.
Projects with 50 per cent or more dwellings as affordable rental could be eligible to pay no LVC across the development.
The Government may also contemplate some upfront financial assistance such as a grant to assist with development costs.
But the Government will not consider a concession on general rates or the foreign ownership land tax surcharge.
There are additional benefits for eligible community housing projects, including a land tax exemption and LVC discount.
The Government wants projects that will deliver long-term rentals, universal dwelling and service standards so affordable rental tenants enjoy the same quality housing and amenities as market rent tenants, and favourable locations for higher density living, with good access to transport, work and study.
Its preference is for developments where there is a single title, or no titling of the residential dwellings so that the individual dwellings are retained in a true long-term rental model.
Build-to-rent while common overseas is relatively new to Australia but is becoming an increasingly popular response to the challenges posed by Australia’s highly-priced property market.
Projects are usually developed under a single title to provide long-term, secure rentals and managed by a single entity rather than individual landlords.
They usually offer a range of amenities.
The first round will close on 7 February 2023 and be finalised as part of the 2023-24 budget process.
The Government will consider proposals that are both pre-development application (DA) and post-DA, as long as there is a site attached.
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