The Queensland Government has announced a 50% land tax cut for eligible Build-To-Rent (BTR) developments that include an affordable housing component. Foreign investors are also expected to benefit from proposed exemptions from foreign investor land tax surcharges and 'additional foreign acquirer duty' on BTR land. The measures are to commence from 1 July 2023 and the Government has indicated it will consult with the property industry before introducing legislation.

BTR land tax and foreign owner / acquirer tax concessions

On 28 March 2023, the Hon. Cameron Dick (Queensland Treasurer and Minister for Trade and Investment) announced a proposal to provide the BTR sector with land tax and foreign investor duty concessions that are to apply from 1 July 2023.

One of the key eligibility requirements for the concessions will be that a BTR development must feature an affordable housing component which represents at least 10% of the homes available for rent. The measures are aimed at achieving a key goal of the Queensland Housing Summit, being to increase affordable housing supply in the State.

While we await the release of legislation for the details, the Treasurer's announcement indicates that the range of concessions to be available for eligible BTR developments will include:

• a 50% discount on general land tax payable for up to 20 years;
• a full exemption from the 2% foreign investor land tax surcharge for up to 20 years; and
• a full exemption from the additional foreign acquirer duty for the future transfer of a BTR site.

The Treasurer's announcement also states that the Queensland Treasury will consult with the property industry "to ensure [the proposed concessions] can support the delivery of more homes for Queenslanders."

Queensland BTR concessions compared to those available in New South Wales and Victoria

The Queensland measures for the BTR sector follow on from similar measures currently available in New South Wales and Victoria.

In brief, key similarities and differences are as follows:

BTR Land Tax Concessions

• Land tax discount for eligible BTR development land:

• New South Wales and Victoria – discount based on a 50% reduction of taxable value of BTR land.
• Queensland – 50% discount (mechanism for discount not yet confirmed).

• Timeframe over which BTR concessions may be available:

• Queensland – up to 20 years from 1 July 2023;
• New South Wales – currently proposed to end in 2040;
• Victoria – up to 30 years.

• Requirement for affordable / social housing in eligible BTR development:

• Queensland and New South Wales – a component of the BTR development must have social and/or affordable housing;
• Victoria – no requirement for social / affordable housing to qualify for concession.

• Subdivisions possible?

• New South Wales – concession can be revoked if land is subsequently subdivided;
• Victoria – subdivisions are possible;
• Queensland – unknown.

BTR Duty Concessions

• Queensland – exemption from additional foreign acquirer duty surcharge should be available for the acquisition of an eligible BTR site (per the Queensland Treasurer's announcement).
• New South Wales – exemption from additional foreign acquirer duty surcharge available if (broadly) the land qualifies for the BTR land tax concession and the acquirer is incorporated under the Corporations Act 2001 (Cwth).
• Victoria – exemption from additional foreign acquirer duty surcharge available if satisfy Victorian Treasurer's guidelines for relief (factors considered include: extent of commercial operations in Australia; degree of foreign ownership and control; whether activities add to housing stock in Victoria; impact on Victorian economy and community of activities; demonstrated good corporate behaviours).
• No concessions from transfer duty that is payable by all purchasers / acquirers of land in all States and Territories (i.e. concessions limited to additional foreign acquirer duty surcharge – if applicable).

For further details on the New South Wales and Victorian concessions for BTR developments, see our previous technical updates:

NSW announces Land Tax discounts for build-to-rent developments - Insight - MinterEllison

Victoria introduces windfall gains tax and build-to-rent land tax concession - Technical update - MinterEllison

Our team has been instrumental in assisting investors develop BTR portfolios in Australia, and is well placed to assist existing and prospective investors considering investment in this growing sector. Please contact a member of our team below to discuss any queries regarding BTR considerations from a tax perspective.