This bill became law on Dec 10th, 2024.
Budget, tax & economy
Australia now charges a misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. when a build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. project wrongly claims special tax breaks after becoming ineligible.
Build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. projects could keep benefiting from special tax breaks even after they stopped meeting the rules during the 15-year compliance periodThe period the project must keep meeting the build-to-rent rules to keep its tax benefits.. This bill creates a misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. and lets the Tax CommissionerThe tax official who can decide whether to waive the misuse tax in a temporary breach that was outside the owner’s control. waive it for temporary breaches outside an owner’s control if fixed quickly.
As the government pursued build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax concessions to encourage more rental housing, MPs were debating the reforms against a very tight rental market and widespread rental stress, while also recognising that projects could otherwise keep those tax benefits even if they later stopped meeting the scheme's 15-year rules. This bill responded by adding a 1.5 per cent misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies., with a limited waiver for temporary breaches outside an owner's control, and the measure became law after Parliament passed it in November 2024 and Royal AssentThe final step that turns a passed bill into an Act, after the Governor-General approves it. followed in December.
The main criticism was that the build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. package would hand tax advantages to large investors and developers without doing enough to improve affordability or help more Australians buy a home. That case was pushed mainly by Coalition speakers and the Greens, while some crossbench supporters said any benefits would depend on tighter affordability targeting and close monitoring.
Stephen Jones MPA parliamentarian who spoke for or against the bill in debate. introduced this bill. It passed with support from Labor, Greens, Australia's Voice, some crossbench members; opposed by Liberal Party, Nationals, One Nation, UAP, some crossbench members.
Did it become law?
Yes
Became law 10 Dec 2024
Final passage
Recorded final vote
1 counted final-passage vote was recorded.
Passage speed
188 days
From introduction to the latest recorded parliamentary step
Meaning
Australia now charges a misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. when a build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. project wrongly claims special tax breaks after becoming ineligible.
The misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. is set at 1.5% of a build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. project's misuse amount for that income year.
Owners can be made to repay earlier build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax benefits if a project stops meeting the rules during its 15-year compliance periodThe period the project must keep meeting the build-to-rent rules to keep its tax benefits..
The Tax CommissionerThe tax official who can decide whether to waive the misuse tax in a temporary breach that was outside the owner’s control. can waive misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. for a temporary breach outside the owner's control if the problem is fixed as soon as practical.
The Act starts on the first 1 January, 1 April, 1 July or 1 October after Royal AssentThe final step that turns a passed bill into an Act, after the Governor-General approves it..
The Imposition Bill imposes a misuse tax when one or both tax concessions are claimed in circumstances where they are not available due to BTR development ineligibility.Capital Works (Build to Rent Misuse Tax) explanatory memorandum
The amount of tax is 1.5% of the build to rent misuse amount for the income year.Capital Works (Build to Rent Misuse Tax) Act 2024 final Act text
The BTR development misuse tax is a key integrity feature of the BTR scheme and aims to ensure that BTR developments are available for rent throughout the 15-year compliance period. The misuse tax approximately claws back tax benefits claimed by entities where the BTR development ceases to be an active BTR development during the 15year BTR compliance period. As discussed at paragraph 1.112 above, the misuse tax does not apply where a BTR development ceases to be an active BTR development after the compliance period. Any non-compliance is dealt with through the amended assessment process. [Schedule 1 to the Bill, item 11, sections 44-1 and 44-5 of the ITAA 1997]Capital Works (Build to Rent Misuse Tax) explanatory memorandum
Relief from the BTR development misuse tax is available through the Commissioner’s discretion to determine that a BTR development complied with particular eligibility criteria for tax concessions, despite non-compliance. This applies if the non-compliance with that eligibility criteria was due to events outside the entity’s control (for example, a temporary unforeseeable event) and the Commissioner is satisfied of particular matters (including that the entity rectified the cause of the ineligibility as soon as was practicable).Capital Works (Build to Rent Misuse Tax) explanatory memorandum
The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent.Capital Works (Build to Rent Misuse Tax) Act 2024 final Act text
Context
As the government pursued build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax concessions to encourage more rental housing, MPs were debating the reforms against a very tight rental market and widespread rental stress, while also recognising that projects could otherwise keep those tax benefits even if they later stopped meeting the scheme's 15-year rules. This bill responded by adding a 1.5 per cent misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies., with a limited waiver for temporary breaches outside an owner's control, and the measure became law after Parliament passed it in November 2024 and Royal AssentThe final step that turns a passed bill into an Act, after the Governor-General approves it. followed in December.
2023 budget announces build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax incentives
Government members said the 2023 budget had already announced build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax reforms intended to add rental supply through institutional investment.
Hansard ↗Government introduces a misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. for non-compliant build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. projects
The second reading speech said the bill would impose a 1.5 per cent tax to neutralise build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax benefits claimed when a development fails the 15-year compliance requirement.
Hansard ↗Parliament links the reform to a tight rental market
During debate, MPs described one of the tightest rental supply periods on record and said nearly 70 per cent of renters were experiencing rental stress.
Hansard ↗Parliament passes the bill
Both houses passed the bill in the same form, completing the parliamentary approval needed to add the new misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. to the build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. scheme.
Parliamentary timeline ↗Royal AssentThe final step that turns a passed bill into an Act, after the Governor-General approves it. makes the misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. law
The Governor-General's assent turned the bill into an Act, locking in the new integrity rule and its commencement timetable tied to the next quarterly start date.
Parliamentary timeline ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
Referred to Committee (05/06/2024): Senate Economics Legislation Committee; Committee report (04/09/2024)
Referred to committee
APH bill page notesThe bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
Second reading debate
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
Reported from Federation Chamber
Recorded vote: 83 to 50.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
Recorded vote: 32 to 26.
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal AssentThe final step that turns a passed bill into an Act, after the Governor-General approves it., turning the bill into an Act.
Key criticism
The main criticism was that the build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. package would hand tax advantages to large investors and developers without doing enough to improve affordability or help more Australians buy a home. That case was pushed mainly by Coalition speakers and the Greens, while some crossbench supporters said any benefits would depend on tighter affordability targeting and close monitoring.
Criticism centred more on housing policy design than on the misuse-tax enforcement mechanism itself.
Favours big investors over homebuyers
Opponents argued the bill sits within a build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax package that benefits large institutional investors, super funds and developers while doing little for first-home buyers or ordinary owner-occupiers. They said it risks steering policy toward a larger rental market instead of making home ownership easier.
Too little real affordability benefit
Critics said the concessions could support projects that remain unaffordable in practice, unless the law requires stronger affordability rules or other safeguards such as rent caps or more public housing. Supportive crossbench speakers made narrower versions of the same point, warning that tax settings alone may not reach the renters under the most pressure.
Further sources
Votes
The chamber-passage votes come first. Expand a vote to see the party breakdown.
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Passed 32 to 26. Support came from Labor, Greens, Australia's Voice, and minor parties and independents. Opposition came from Liberal Party, Nationals, One Nation, and UAP. Minor-party and independent votes were split.
Earlier bill-stage votes
Passed 83 to 50. Support came from Labor, Centre Alliance, and minor parties and independents. Opposition came from Liberal Party and Nationals. Minor-party and independent votes were split.
Recorded amendment and procedural votes grouped by chamber. Expand a vote to see the party breakdown.
Senate
Defeated 27 to 32. Support came from Liberal Party, Nationals, One Nation, and UAP. Opposition came from Labor, Greens, Australia's Voice, and minor parties and independents. Minor-party and independent votes were split.
This was a main vote on the principle of the bill.
Defeated 12 to 27. Support came from Greens and Australia's Voice. Opposition came from Labor, Liberal Party, Nationals, One Nation, and minor parties and independents.
This was the Greens' attempt to turn the second-reading debate into a housing affordability critique and set of policy demands before the bill was read a second time. The amendment was defeated, so the bill proceeded without those calls being adopted.
Passed 33 to 22. Support came from Labor, Greens, Australia's Voice, One Nation, and minor parties and independents. Opposition came from Liberal Party, Nationals, and UAP. Minor-party and independent votes were split.
This was a substantive tax amendment that widened the concessional build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. settings, with the stated effect that non-compliant operators could later face a larger misuse taxA penalty tax charged when a build-to-rent project keeps claiming the tax concessions after it no longer qualifies. clawback. The amendment was carried.
Defeated 26 to 32. Support came from Liberal Party, Nationals, One Nation, and UAP. Opposition came from Labor, Greens, Australia's Voice, and minor parties and independents. Minor-party and independent votes were split.
This was another counted vote on the same opposition attempt to strip out a small-business tax measure from the bill. The amendment was defeated, leaving the schedule intact.
Defeated 27 to 31. Support came from Liberal Party, Nationals, Australia's Voice, and One Nation. Opposition came from Labor, Greens, and minor parties and independents. Minor-party and independent votes were split.
This was a direct change to the bill's small-business depreciation settings, lifting the relevant threshold and updating related examples and notes. The package was defeated, so the bill kept the lower threshold settings as drafted.
Defeated 27 to 32. Support came from Liberal Party, Nationals, One Nation, and UAP. Opposition came from Labor, Greens, Australia's Voice, and minor parties and independents. Minor-party and independent votes were split.
The proposed change was not agreed.
Defeated 26 to 32. Support came from Liberal Party, Nationals, One Nation, and UAP. Opposition came from Labor, Greens, Australia's Voice, and minor parties and independents. Minor-party and independent votes were split.
This was the same substantive small-business threshold increase recorded in the journal division. The package was defeated, so the smaller threshold remained in the bill.
This list includes amendment votes, procedural votes and votes on the bill itself.
Parliamentary debate
Start here — lead voices
Stephen Jones supports the bill, saying it is an integrity measure that imposes a 1.5 per cent tax on the build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. misuse amount when a project fails the 15 year compliance period.
Read in Hansard ↗Howarth opposes the bill because he says its build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax changes will not fix the rental shortage quickly enough and instead favour corporate ownership over home ownership.
Read in Hansard ↗Steggall supports the build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. measures because they should add rental supply and give renters more stability, but she says the policy is only part of the housing fix and needs sharper targeting so it actually helps the people most under pressure.
Read in Hansard ↗Sharkie supports the bill’s build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. tax changes, saying they should encourage investment in housing that is purpose-built for rent and help improve affordability and supply.
Read in Hansard ↗All speeches by bloc
6 speakers · 7 contributions · 6 support
“These measures will apply from 1 July this year. This is yet another piece in the suite of programs and incentives that we're providing, because housing is a priority. Increasing the housing supply is a huge priority for us, and I am pleased to see that this aspect is covered in this bill.”Read the full speech in Hansard ↗
“I am sure build-to-rent will become a really important part of our housing mix, and this bill provides two significant tax incentives to encourage investment in this housing type. This bill increases the depreciation rate for capital works in eligible build-to-rent projects to four per cent per annum and reduces the depreciation period from 40 years to 25 years.”Read the full speech in Hansard ↗
“This legislation we are debating is all about incentivising the construction of those new build-to-rent developments because we want more investment in the build-to-rent sector. We want more of those affordable homes because we want to continue expanding Australia's housing supply. This problem is fundamentally about supply, supply, supply. Everything we are doing is about increasing that supply and addressing the problem. That's why the Albanese government is making a significant investment into housing after a decade of very little or no action from the former coalition government.”Read the full speech in Hansard ↗
“I know that a lot of people in my electorate are concerned about housing. We have been very focused on building more houses in the time that we have been in government. This bill helps to continue with that focus by encouraging investment in the build-to-rent sector, expanding Australia's housing supply. It does this by reducing the final withholding tax rate on eligible fund payments, which are distributions of rental income and capital gains, from managed investment trust investments to 15 per cent, down from 30 per cent. The amendment also increases the depreciation rate for capital works in eligible projects from 2.5 per cent per annum to four per cent per annum.”Read the full speech in Hansard ↗
“Another important part of this bill that I want to highlight is the work we are doing on build-to-rent investments. This will be important in helping to expand Australia's housing supply. It will help to increase rental supply at scale, at a time when there is an acute shortage of new rental stock.”Read the full speech in Hansard ↗
Hansard records 2 separate contributions by Stephen Jones on this bill. They are grouped here so the speaker is listed once.
Second reading speech
Stephen Jones supports the bill, saying it is an integrity measure that imposes a 1.5 per cent tax on the build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. misuse amount when a project fails the 15 year compliance period. He presents it as necessary to neutralise tax benefits that would otherwise be claimed improperly.
“The Capital Works (Build to Rent Misuse Tax) Bill 2024 imposes a tax rate of 1.5 per cent of the build-to-rent misuse amount for an income year. It is a key integrity feature of the build-to-rent scheme and is intended to neutralise tax benefits claimed where a build-to-rent development does not meet the minimum compliance period of 15 years.”Read this contribution in Hansard ↗
Second reading speech
Jones supports the bill and says the build-to-rentA housing model where a developer keeps the project to rent it out, rather than selling the apartments one by one. changes are part of the solution to housing pressures by helping prove up an asset class and increase rental accommodation in cities. He says Labor will not support the second reading amendment or the foreshadowed substantive amendments.
“Finally, a lot of heat and words have been exchanged over the build-to-rent measures. I note that once again the member for Griffith is encouraging this chamber to entertain unconstitutional measures by requiring the Commonwealth government to introduce rent freezes. He knows full well—or he should by now; he has been banging on about this for two years—that we can't do that. It's good for TikTok, but it's not good for the credibility of this place for us to be calling for these things. The simple fact is that we need a lot of measures to deal with the housing issues. I don't pretend for one moment that the build-to-rent measures that we've included within this bill are the solution overall to all of the housing pressures. But proving up an asset class and ensuring that there is more rental accommodation in our cities, which are short on all forms of accommodation, including rental accommodation, is a part of the solution, and that's why we put it forward in this bill.”Read this contribution in Hansard ↗
5 speakers · 5 oppose
“The Property Council of Australia has warned that 'the detail of the legislation doesn't live up to the government's intended goals' and that 'this legislation must be fixed'. The Real Estate Institute of Australia says 'build-to-rent will take time to come online and our shortages are now'. Finding somewhere to live is getting harder under this Labor-Greens government, and this significantly delayed and ineffective build-to-rent proposal isn't going to make it easier. The coalition will oppose schedule 1 and move amendments to remove it from this bill.”Read the full speech in Hansard ↗
“The build-to-rent component of the omnibus bill is a classic example of this ideology at work.”Read the full speech in Hansard ↗
“You might say that's okay. You might say that's not okay. But for those people who say it is okay, I would say, 'This is selling out the Australian public who want to be owner-occupiers.' That's what this is doing. This is ignoring mums and dads out there or people who may be single who want to buy and invest in their own home. This does nothing for them.”Read the full speech in Hansard ↗
“This government talks about the importance of the build-to-rent scheme and about providing homes to Australians, but we learnt only about a month ago, probably not even that, that this government has spent $30 million—that's three-zero—on their Housing Australia Future Fund. Do you know how many houses they've built? I'll give you a clue: it starts with 'Z' and ends with 'O'. Donuts. Thirty million dollars, for not one house to be built. Only a Labor federal government can deliver that. So when they come out and talk the big talk about this build-to-rent scheme, you will excuse an old chippie for being a little bit sceptical about this government's plan to resolve the housing crisis that we now find ourselves in. This government is all about providing mechanisms for institutional investors to own these build-to-rent schemes. The big super funds and foreign companies will own these build-to-rent schemes. They will be the ones that invest in these build-to-rent schemes.”Read the full speech in Hansard ↗
“As I have said, some of the elements are uncontroversial and some are worthy of support, like the instant asset write-off—which is good but should go further—and some should be opposed. I think the build-to-rent tax incentives ought to be removed from the bill and considered separately. So it's a frustrating one, because I think there's a lot of good stuff in here, but it's very difficult to support.”Read the full speech in Hansard ↗
1 speaker · 1 oppose
“Once again Labor is not only tinkering around the edges of this housing crisis; it is bowling up plans that will make this housing crisis worse. How is it that, in the middle of the worst housing crisis that we have seen in generations—millions of renters and mortgage holders falling into severe financial stress, millions of first home buyers unable to buy their first home—Labor's proposal is to give more tax handouts to property developers and investment funds to build rental apartments that almost no-one will be able to afford?”Read the full speech in Hansard ↗
4 speakers · 4 support
“The government has committed, through this bill and this schedule, to build 1.2 million houses by the end of the decade, and reducing the acute shortage of new rental stock is absolutely fundamental to achieving this. The government has been unveiling several new initiatives to help tackle the crisis, and this bill provides another piece of the puzzle—build-to-rent tax incentives. These provisions will go some way to alleviate the lack of supply of rental properties, at least in some parts of the country.”Read the full speech in Hansard ↗
“Reducing the final withholding tax rate on eligible fund payments—rental income and capital gains from managed investment trust investments—from 30 per cent to 15 per cent is a welcome step, as is increasing the deduction rate for capital works in eligible developments from 2.5 to four per cent per annum. This should encourage investment in build-to-rent, which I support as a means to foster a global proven model to address housing affordability and availability.”Read the full speech in Hansard ↗
“Schedule 1 of this bill will reduce the managed investment trusts withholding tax rate from 30 per cent to 15 per cent and increase the capital works deduction from 2.5 per cent to four per cent. It's using the tax system to create a more attractive investment environment for developers looking at buy to rent. That's going to make it more attractive to investors. Across the board, stakeholders are pretty supportive of this measure. I'm particularly supportive of the requirement for 10 per cent of dwellings in a build-to-rent development to be affordable housing. In 2022 the WA state government announced a 50 per cent exemption from land tax for up to 20 years for build-to-rent developments. Since then, the WA government has announced two projects that will go ahead, with three more projects progressing through a shortlist of offers.”Read the full speech in Hansard ↗
“This bill is important, and I support the action taken, although I am cautious about an early celebration. The measures included need to form part of a package that makes the development and construction of housing in Australia more viable to investors. Tax settings alone will not lift our housing approvals and completion numbers that sit at record lows. We need to find ways to free up capacity in the broader construction sector to lower the input costs of development. According to the ABS, construction costs are actually up by 30 per cent on 2019 values. The Property Council has also warned that these measures to bring build-to-rent investments in line with other types of property are undermined by the mandated provision of affordable housing. Acknowledging the need for more affordable housing, the Property Council have advocated for a differentiated withholding tax of 10 per cent for affordable housing investment or for other forms of additional incentives to be applied.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Referred to Federation Chamber
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Reported from Federation Chamber
Reported from Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Recorded vote: 83 to 50.
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Third reading agreed to
Recorded vote: 32 to 26.
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal AssentThe final step that turns a passed bill into an Act, after the Governor-General approves it., turning the bill into an Act.
Senate Economics Legislation Committee; Committee report (04/09/2024)
Referred to committee
Referred to Committee (5 June 2024): Senate Economics Legislation Committee; Committee report (4 Sept 2024)
APH bill page notes
