House of Representatives

Capital Works (Build to Rent Misuse Tax) Bill 2024

Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024

Explanatory Memorandum

(Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)

UN Committee on Economic, Social and Cultural Rights, General comment No. 4: The right to adequate housing (art. 11(1) of the Covenant), paragraph 1

As above, paragraph 8(c)

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, 4 April 2023, p 22.

National Housing Supply and Affordability Council, State of the Housing System 2024 , May 2024, p 1

NHSAC, State of the Housing System 2024, p 66

NHSAC, State of the Housing System 2024, p 74

NHSAC, State of the Housing System 2024, p 3

Martin et al., Towards an Australian Housing and Homelessness Strategy: understanding national approaches in contemporary policy, AHURI, 15 June 2023, p 60.

National Housing Supply and Affordability Council (2024), "State of the Housing System" 2024, p.35-37

National Housing Supply and Affordability Council, Barriers to Institutional Investment , Finance and Innovation in Housing , July 2023, p 15.

Housing Australia, State of the Nation's Housing Report 2022-23, p 52.

The Senate, The worsening rental crisis in Australia , December 2023, p 30-31

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 20.

2023, NSW Productivity Commission, Building more homes where infrastructure costs less, p 7

2019, UNSW City Futures Research Centre, Strengthening Economic Cases for Housing Policies, p 22

2023, NSW Productivity Commission, Building more homes where infrastructure costs less, p 8

2023, NSW Productivity Commission, Building more homes where infrastructure costs less, p 11

2023, Centre for Independent Studies, Where should we build more housing, p 17

2021, AHURI, Urban productivity and affordable rental housing supply in Australian cities and regions, p 28

2021, AHURI, Urban productivity and affordable rental housing supply in Australian cities and regions, p 12

2021, AHURI, Urban productivity and affordable rental housing supply in Australian cities and regions, p 28

Australian Housing and Urban Research Institute, Housing key workers : scoping challenges , aspirations , and policy responses for Australian cities , May 2021.

Aware Super, Essential worker housing affordability crisis costing Australia $64 billion, 6 October 2023, accessed 14 May 2024.

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 1.

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 17.

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 27

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 53

NHSAC, State of the Housing System 2024, p 66.

NHSAC, State of the Housing System 2024, p 83

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 28.

Affordable housing for tax purposes must satisfy the following conditions: the property must be fixed domestic residential premises; it must be rented or genuinely available for rent, at below-market rates to eligible tenants on low to moderate incomes; and rentals must be managed exclusively by a registered CHP.

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 18.

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 8.

New South Whales Government, Social and affordable housing, n.d., accessed 15 May 2024.

Victoria Government, Housing strategy, n.d., accessed 14 May 2024.

Currently, MIT investments in 'affordable housing' must be managed by CHPs, refer to Division 980 - Affordable housing , Income Tax Assessment Act 1997 .

Average earnings refer to 'Full time adult average weekly earnings - original' as reported by the ABS - not 'seasonally adjusted' and not 'trend'. This is a gross (before tax) figure. This data point is typically released in May and November every year. As at November 2023, the figure is $1,958.

NHSAC, Barriers to institutional investment, p 3

NHSAC, State of the Housing System 2024, p 83

NHSAC, Barriers to institutional investment, p 1

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 22.

NHSAC, Barriers to institutional investment, p 2

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 18.

NHSAC, Barriers to institutional investment, p 22

NHSAC, Barriers to institutional investment, p 23

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 23.

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 22.

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 38.

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 18.

NHSAC, State of the Housing System 2024, p 81

NHSAC, State of the Housing System 2024, p 82

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 27

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 37

NHSAC, Barriers to Institutional Investment, Finance and Innovation in Housing, p 42

Aware Super, Essential worker housing affordability crisis costing Australia $64 billion, 6 October 2023, accessed 14 May 2024.

Colliers, Residential Capital Markets Investment Review 2024, 8 February 2024.

Queensland Land Tax Act 2010 (Qld), s 58R.

Note different requirements apply in different states and territories concerning collection of information from rental tenants.

NHSAC, Barriers to institutional investment report, p 49

Australian Charities and Not-for-profits Commission, Commissioner's Interpretation Statement: Provision of housing by charities, ACNC website, 5 November 2021.

NHSAC, State of the Housing System 2024, p 95

The Hon Julie Collins MP, Housing and Homelessness Ministerial Council meeting [media release], Australian Government, 23 November 2023, accessed 13 May 2024.

NHSAC State of Housing system report p 151

NHSAC, Barriers to Institutional Investment Report, p 24

2021, AHURI, Urban productivity and affordable rental housing supply in Australian cities and regions, p 28

Ernst & Young, A new form of housing supply for Australia: build-to-rent housing report, p 22.

Ordinarily, default, late and missed payment fees are not considered a fee for providing the credit, rather a fee for contravention of any contract terms.

Section 6(5) of the National Credit Code (Schedule 1 to the National Consumer Credit Protection Act 2009).

Regulation 51 of the National Consumer Credit Protection Regulations 2010.

ASIC Regulatory Guide 209 gives guidance to the industry on what ASIC considers is required under the RLOs in the Credit Act.

Discrepancy between ASIC and AFIA results may be attributable to different definitions of 'essentials'.

Unpublished. Not subject to final quality assurance.

Complaints include service quality, credit reporting, unauthorised transactions, and failure to communicate. AFCA reported that they received 1,095 complaints against BNPL firms in FY 2021-22, while ASIC estimates the number of BNPL users to be 6,992,321.

These bad debt numbers for individual firms are not set out in this document as they are commercially sensitive and have been provided in confidence.


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