Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 (138 of 2024)

Schedule 1   Build to rent developments

Income Tax Assessment Act 1997

9   At the end of Subdivision 43-D

Add:

Build to rent developments

43-151 Meaning of active build to rent development area

(1) An active build to rent development area is a part of a building comprising any of the following:

(a) the *dwellings of an *active build to rent development;

(b) any *common areas for those dwellings.

(2) An active build to rent development is a *build to rent development that has:

(a) *commenced to be an active build to rent development (see subsections 43-152(1) and (2)); and

(b) not *ceased to be an active build to rent development (see subsection 43-152(4)).

(3) A common area for *dwellings of a *build to rent development is an area, facility or amenity:

(a) intended for use for the purposes of those dwellings; or

(b) intended for use for the purposes of those dwellings and any other dwellings in the same building.

43-152 Build to rent developments

Commencement

(1) On and after the first day on which a building has 50 or more *dwellings:

(a) that satisfy subsection 43-153(1); and

(b) that the owner of the dwellings chooses to form a *build to rent development in accordance with subsection (6) of this section;

those dwellings are a build to rent development , of the building, that commences to be an *active build to rent development on that day.

(2) Also, on and after the first day (if any):

(a) after the most recent instance of a *build to rent development of a building *commencing to be an *active build to rent development; and

(b) on which the building has 50 or more *dwellings:

(i) that satisfy subsection 43-153(1); and

(ii) that were not part of a build to rent development just before that day; and

(iii) that the owner of the dwellings chooses to form a build to rent development in accordance with subsection (6) of this section;

those dwellings are a build to rent development , of the building, that commences to be an active build to rent development on that day unless an active build to rent development *expands under subsection (3) on that day to include the dwellings.

Expansion

(3) If a building has a *build to rent development (the existing development ) that has *commenced to be an *active build to rent development, on the first day (if any) on which the building has *dwellings (the new dwellings ):

(a) that taken together with the dwellings of the existing development for which the *build to rent compliance period has not ended, satisfy subsection 43-153(1); and

(b) that are not already a part of a build to rent development; and

(c) that the owner of the dwellings chooses to form part of the existing development in accordance with subsection (6) of this section;

the existing development expands to comprise:

(d) the dwellings of the existing development; and

(e) the new dwellings.

Cessation

(4) A *build to rent development ceases to be an *active build to rent development if the dwellings of the active build to rent development for which the *build to rent compliance period has not ended cease to satisfy subsection 43-153(1).

Build to rent compliance period

(5) The build to rent compliance period for a *dwelling of an *active build to rent development is the 15 years beginning on the day after the day on which:

(a) unless paragraph (b) applies - the development *commences to be an active build to rent development; or

(b) if:

(i) the dwelling is not part of the development when it commences to be an active build to rent development; but

(ii) the development *expands to include the dwelling;

the development expands to include the dwelling.

(6) To make a choice for the purposes of paragraph (1)(b), subparagraph (2)(b)(iii) or paragraph (3)(c) in respect of *dwellings, the owner of the dwellings must:

(a) make the choice in the *approved form; and

(b) give it to the Commissioner.

(7) The choice is taken to be made on the following day:

(a) if:

(i) the owner nominates a day in the choice; and

(ii) the Commissioner receives the choice before the nominated day;

the nominated day; or

(b) otherwise - the day the Commissioner receives the choice.

43-153 Build to rent developments - eligibility

(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.

(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.

(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

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

(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.

(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.

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

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

(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

(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.

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

43-154 Notice of events

(1) If any of the following events happen in relation to a *build to rent development, each entity to which subsection (3) applies must notify the Commissioner of the event:

(a) the development *commences to be an *active build to rent development;

(b) the development *expands;

(c) the *ownership interest in the development is acquired by another entity;

(d) the development *ceases to be an active build to rent development.

(2) The notice must be:

(a) in the *approved form; and

(b) given no later than 28 days after the event.

(3) This subsection applies to the following entities:

(a) the owner of the development at the time just before the event happens;

(b) if in the income year in which the event happens, an entity is required to notify the Commissioner under subsection 16-150(4) in Schedule 1 to the Taxation Administration Act 1953 of an amount to which subsection 12-450(5) in that Schedule applies, to any extent, because of a *dwelling of the development - the entity;

(c) if the event is the event mentioned in paragraph (1)(c) of this section - the entity that acquires the *ownership interest in the development.

43-154A References to buildings

A reference in sections 43-151 to 43-153 to a building includes a reference to any other buildings that are on the same or adjacent land.