Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 43 - Deductions for capital works  

Subdivision 43-D - Deductible uses of capital works  

Build to rent developments

SECTION 43-153   Build to rent developments - eligibility  

43-153(1)    
For the purposes of section 43-152 , *dwellings of a building satisfy this subsection at a particular time if, at that time:

(a)    each of the dwellings is:

(i) available to the public to be tenanted by way of lease for a period of 5 years or more in accordance with any requirements determined under subsection (1A) ; or

(ii) being tenanted by way of lease as a result of being made available to the public to be tenanted by way of lease for a period of 5 years or more in accordance with any requirements determined under subsection (1A) ; and

(b)    all of the dwellings are:

(i) *residential premises; and

(ii) *taxable Australian real property; and

(iii) not *commercial residential premises; and

(c)    all of the dwellings and *common areas for the dwellings are owned by a single entity; and

(d)    the number of the dwellings that are *affordable dwellings is equal to or greater than:

(i) 10% of the number of the dwellings; or

(ii) if the number of dwellings worked out under subparagraph (i) is not a whole number - that number rounded down to the nearest whole number of dwellings; and

(e)    subsection (5) applies to each of the affordable dwellings.

Note:

For the purposes of paragraph (a) , a lease is still offered to the public for a period of 5 years or more even if a prospective tenant subsequently requests and the lessor accepts a shorter lease.

43-153(1A)    
For the purposes of subparagraphs (1)(a)(i) and (ii) , the Minister may, by legislative instrument, determine requirements relating to the terms of the lease.

43-153(1B)    
For the purposes of subparagraphs (1)(a)(i) and (ii) , disregard a requirement determined under subsection (1A) if complying with that requirement would contravene a law of a State or Territory.

Affordable dwellings

43-153(2)    
A *dwelling is an affordable dwelling if the requirements determined under subsection (3) in relation to the dwelling are met.

43-153(3)    
For the purposes of subsection (2) , the Minister must, by legislative instrument, determine requirements relating to a dwelling. Without limiting this subsection, the requirements may include requirements relating to:

(a)    the rent payable under the lease for the dwelling; or

(b)    the income of the tenant or prospective tenant.

43-153(4)    
A reference in paragraph (1)(a) to the public in relation to a lease of a *dwelling is taken to be a reference to a segment of the public if:

(a)    the dwelling is an *affordable dwelling; and

(b)    requirements determined under subsection (3) require that the dwelling be tenanted, or be available to be tenanted, only to that segment of the public.

43-153(5)    
For the purposes of paragraph (1)(e) , this subsection applies in relation to an affordable dwelling (the test dwelling ) if:

Number of comparable non-affordable dwellings

≥

Number of comparable affordable dwellings

where:

number of comparable affordable dwellings
means the number of the dwellings (including the test dwelling) that:

(a) are *affordable dwellings; and

(b) have the same number of bedrooms as the test dwelling; and

(c) have a floor area that is at least equal to the floor area of the test dwelling, but does not exceed 110% of that floor area.

number of comparable non-affordable dwellings
means the number of the dwellings that:

(a) are not *affordable dwellings; and

(b) have the same number of bedrooms as the test dwelling; and

(c) have a floor area that is at least equal to the floor area of the test dwelling, but does not exceed 110% of that floor area.

Eligibility during construction

43-153(6)    
Dwellings of a building are taken to satisfy subsection (1) at a particular time if:

(a)    one or more of the dwellings is not tenanted, and not available to be tenanted, at that time as mentioned in paragraph (1)(a) because of:

(i) construction of an extension, alteration or improvement to any of the dwellings or the building; or

(ii) the making of repairs to any of the dwellings or the building; and

(b)    the dwellings satisfied subsection (1) just before paragraph (a) of this subsection began to apply; and

(c)    it is reasonable to expect that the dwellings will satisfy subsection (1) when the construction or repairs are completed.

Commissioner ' s discretion

43-153(7)    
The Commissioner may determine that *dwellings of a building are taken to satisfy one or more of paragraphs (1)(a) , (d) and (e) (the eligibility criteria ) at all times during a particular period, if:

(a)    the entity that owns the dwellings applies to the Commissioner in the *approved form; and

(b)    the Commissioner is satisfied of the following:

(i) the dwellings did not otherwise satisfy the eligibility criteria at all times during the period due to events outside the control of the entity;

(ii) the entity took all reasonable steps to ensure that the dwellings would satisfy the eligibility criteria as soon as practicable;

(iii) at the time of the determination, the dwellings satisfy the eligibility criteria;

(iv) at the time of the determination, the entity intends that each dwelling will satisfy subsection (1) for the remainder of its *build to rent compliance period.

43-153(8)    
A determination made under subsection (7) has effect according to its terms.