Changes to thin capitalisation rules would offset the build-to-rent tax changes that were announced at the May budget, Mirvac’s Angela Buckley said.
Developing build-to-rent projects will be difficult if the federal government pushes ahead with its proposed thin capitalisation changes, Mirvac’s build-to-rent lead Angela Buckley said.two months ago to reduce the interest payment deductions available to entities such as property trusts as a way to prevent companies from minimising the tax they pay.
Greystar managing director Chris Key, who appeared alongside Ms Buckley at a Property Council panel on Wednesday, declined to comment on the proposed thin capitalisation rules but called for the federal government to pick up the pace in finalising the MIT tax reforms which have yet to come into effect.
Allens partner Felicity Rourke agreed with Mr Key, saying that a number of BTR projects have been paused as a result of the MIT tax reforms not yet being finalised.The call for quicker policy changes is set against a backdrop where the national BTR pipeline has accelerated, reaching a total of 45,000 units. But those numbers still fell short in addressing Australia’s housing shortage, according to analysis from Allens and Urbis.
Addressing BTR’s role in easing the housing shortage, Ms Buckley said the perception around BTR primarily being for the wealthy needed to change. She said Mirvac’s most common BTR customers were couples seeking one-bedroom apartments.“We have to lose this idea that this is a rich kid’s playground. That it is for a certain customer and BTR is really premium,” Ms Buckley said.
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