Supplementary Explanatory Memorandum relating to sheet PC122
(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)General outline and financial impact
Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 - Parliamentary Amendments to Schedule 1
Outline
The Parliamentary Amendments to Schedule 1 to the Bill:
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- extend the minimum lease period for dwellings in an active BTR development from three years to five years, requiring dwellings to either be made available to the public to be tenanted for a lease term of at least five years or tenanted for lease terms of at least five years;
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- require each of the dwellings to be made available to the public to be tenanted or tenanted by way of lease in accordance with any requirements relating to lease terms that are determined by the Minister by legislative instrument;
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- amend the definition of 'affordable dwelling' to provide that a dwelling is an affordable dwelling if it satisfies the requirements determined by the Minister by legislative instrument;
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- revise the provisions that deal with the BTR misuse tax by imposing liability to pay the BTR misuse tax on the entity that owns the BTR development immediately before that development ceased to be an active BTR development;
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- adjust the way the BTR misuse tax is calculated;
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- extend the notification obligation relating to the acquisition of an ownership interest in the BTR development, requiring the acquiring entity as well as the disposing entity to notify the Commissioner of the change of ownership interest within 28 days of the change of ownership event; and
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- extend eligibility for the MIT withholding tax concession to all BTR developments that satisfy the eligibility requirements, even if the development existed, or construction on the development had commenced, before or on 7:30 pm, by legal time in the Australian Capital Territory, on 9 May 2023.
Date of effect
The Imposition Bill commences on the first 1 January, 1 April, 1 July or 1 October to occur after the day that Bill receives Royal Assent.
The Bill, as amended, commences at the same time as the Imposition Bill. However, the provisions of the Bill do not commence at all if the Imposition Bill does not commence.
The amendments to section 43-145 of the ITAA 1997 made by Schedule 1 to the Bill apply to capital works that commenced after 7:30 pm, by legal time in the Australian Capital Territory, on 9 May 2023. The amendment of section 12-450 in Schedule 1 to the TAA 1953 made by Schedule 1 to the Bill applies to an amount that is referable to a payment of rental income made on or after 1 July 2024; or an amount that is, or is attributable, to a capital gain, or part of a capital gain, from a CGT event that happens on or after 1 July 2024.
Financial impact
The Parliamentary Amendments to Schedule 1 to the Bill are estimated to have a negative impact on the underlying cash of $45 million over the forward estimates and $185 million over the medium term.
Human rights implications
The Parliamentary Amendments raise human rights issues. See Statement of Compatibility with Human Rights - Chapter 2.
Compliance cost impact
The compliance cost impact is unchanged.