The Property Council of Australia, Community Housing Industry Association (CHIA), and National Shelter have welcomed new regulations aimed at boosting affordable rental housing supply.
Following the passage of the Build to Rent legislation in November 2024 – which the Property Council advocated for – The Income Tax Assessment (Build to Rent Developments) Amendment (Expanding Affordability Requirements) Determination 2025 has now come into effect.
The regulation provides key details on the legislation’s implementation and allows Build to Rent providers to ‘opt in’ and deliver affordable rental homes. It is expected to deliver 80,000 rental homes over the next decade.
“This is a welcome investment in 80,000 secure rental homes over the next decade. Of these, 8,000 will be affordable, with 1,200 ready to be rented in the near future.
“This is the largest ever Federal effort to help relieve pressure on renters. We look forward to working with the Government and industry colleagues on future details and supporting the important commitment to future drafting banning ‘no cause’ evictions.”
Mike Zorbas, Chief Executive, Property Council
The legislation includes key amendments proposed by CHIA, National Shelter, and the Property Council, championed by Housing Minister Clare O’Neil and independent Senator David Pocock. These amendments were ultimately supported by the crossbench.
Key changes in the legislation include:
- Minimum tenancy terms increased to five years.
- Affordable tenancies now available for moderate and low-income earners.
- Affordable tenancies to ensure availability for moderate-income earners, with 20% reserved for low-income earners.
- Rents for these tenancies capped at 74.9% of market value or 30% of household income, whichever is lower.
“This is a critically important initiative that will provide a pipeline of genuine affordable housing for households that have few other alternatives.
“When done correctly, Build to Rent provides tenants the sort of stability they badly need but can’t get because private ownership is out of their reach.
“It has been great to collaborate with the Property Council and National Shelter to help strengthen the legislation and we will continue to work together to ensure that additional regulations are introduced to ban ‘no cause’ evictions and, critically, that the legislation is successfully implemented.”
Wendy Hayhurst, CEO, CHIA
Alongside 20% of affordable housing being reserved for low-income earners, the passing of legislation has ensured that transition support is available for tenants moving from low- to moderate-income brackets, whilst preventing additional service charges for amenities.
It also ensures that affordable tenancies are required to be managed by registered, not-for-profit community housing organisations (CHOs), which will oversee tenant eligibility and compliance but not physical property management.
The legislation will help immediately unlock 1,200 affordable tenancies by extending the 15% MIT withholding tax rate to eligible existing Build to Rent developments. Moreover, it will strengthen security of tenure with five-year leases, increasing the original three-year requirement.
The legislation will also ensure that Build to Rent operators do not use ‘no cause’ eviction clauses as a condition of accessing tax concessions.
“This legislation is badly needed, especially for people on lower incomes. With the changes to reserve some affordable tenancies for people on low incomes, a good piece of legislation is now great. Any day that gives people more housing security is a good day.
“The move to increase minimum lease term offers to five years is most welcome and National Shelter will continue work with CHIA, the Property Council and the Government to finalise the approach to banning ‘no cause’ evictions.”
Karen Walsh, CEO, National Shelter
With the National Rental Affordability Scheme (NRAS) ending and 6,750 properties losing affordability status between April and December, there is an urgent need to bring new affordable rental housing to market. The latest regulatory changes are expected to facilitate this transition and provide long-term stability for renters.
