GEN 001v2: Treasurer’s Guidelines for the Reduction in Land Value for Certain Build-to-rent Properties, for Land Tax Purposes

Part 1 - Preliminary

Name

1.1 This instrument is the Treasurer’s guidelines for the reduction in land value for certain build-to-rent properties for land tax purposes.

Date of publication and version

1.2 4 December 2025, version no. 2.

Authority

1.3 The Treasurer may publish this instrument for the purposes of administration by the Chief Commissioner of State Revenue (Chief Commissioner) of a reduction in land value for certain build-to-rent properties for land tax purposes under sections 9E and 9F of the Land Tax Management Act 1956 (the Act).

The purpose of the concessions

1.4 The purpose of these tax concessions is to incentivise increased institutional investment in housing and construction in the build-to-rent sector. Increased institutional investment in housing and the construction of more build-to-rent developments:

1. will increase rental housing supply and offer more housing choice for people at different stages of life,
2. may provide tenants with greater rental security and greater quality rental services than that typically offered by small investor landlords, and
3. may improve building quality and promote faster resolution of coordination issues associated with both new and old buildings.

The Guidelines

1.5 Sections 9E and 9F of the Act provides that, for the purposes of assessing land tax, the land value of a parcel of land is to be reduced by 50 per cent if, amongst other things, the Chief Commissioner is satisfied that the building is being used and occupied for a build-to-rent property in accordance with guidelines approved by the Treasurer.

1.6 These guidelines have been approved by the Treasurer under sections 9E and 9F of the Act and provide guidance to the Chief Commissioner in forming a view on whether a particular property is being used and occupied for a build-to-rent property under the relevant section, so that the relevant land tax concession(s) can be granted.

1.7 If the Chief Commissioner is not satisfied that the building is being used and occupied for a build-to-rent property in accordance with these guidelines, then the land value reduction provided by sections 9E and/or 9F of the Act is not to be applied.

1.8 Further, if the Chief Commissioner is satisfied that only part of a parcel of a land is being used and occupied for a build-to-rent property, the reduction in land value is to be proportionately decreased in accordance with these guidelines.

1.9 These guidelines also provide guidance to the Chief Commissioner in forming a view on:

1. whether a build-to-rent property meets the construction requirements under section 9F of the Act
2. restrictions on subdivision under section 9E and 9F of the Act, and
3. concurrent application of sections 9E and 9F of the Act.

1.10 The Chief Commissioner may provide further guidance material, including examples of the operational effect of these provisions.

1.11 These guidelines will also assist in determining whether a building is ‘taken to be build-to-rent property under sections 9E or 9F of the Act’ for the purposes of the surcharge land tax concession under section 5CA of the Land Tax Act 1956 and surcharge purchaser duty concession under section 104ZJB Duties Act 1997 . Under these provisions, amongst other things, for a foreign owner to be entitled to the concessions, the Chief Commissioner must be satisfied that the building is a build-to-rent property under sections 9E or 9F of the Act.

Part 2 – Requirements for buildings used and occupied for a build-to-rent property under sections 9E and 9F of the Act

2.1 A building (including a group of buildings or parts of buildings on the same parcel of land) must satisfy the following conditions in order to be considered as used and occupied for a build-to-rent property for the purposes of subsections 9E(2)(d) and 9F(2)(c)(i) of the Act.

1. Planning requirements
   All requirements of the relevant development consent must be complied with.
2. Building requirements
   1. The buildings on a parcel of land must contain at least 50 self-contained dwellings used specifically for the purpose of build-to-rent.

   Note: Dwellings can be spread across multiple buildings on the same parcel of land.

   2. Where an adjacent parcel of land is consolidated with a parcel of land that already qualifies for the concession into a single new parcel of land, and the adjacent parcel of land provides additional build-to-rent dwellings to the property, the additional dwellings do not have to separately meet the 50 dwelling threshold of Requirement 2.1(b)(i) as these dwellings will be added to the total number of dwellings on the original parcel of land and receive the same tax concession as the original parcel of land.

   Note 1: If only part of the adjacent parcel of land that is consolidated is being used and occupied for a build-to-rent property, the concession may be proportionately decreased; see Part 3 – Requirements for proportionate reduction in land value of these guidelines.
   
   Note 2: Where an adjacent parcel of land is not consolidated with a parcel of land that already qualifies for the concession (e.g. by remaining as a separate adjacent parcel of land), eligibility for the concession will be determined separately, and the 50-dwelling requirement will be applicable. The owner of the adjacent parcel of land may apply for the tax concession under sections 9E or 9F of the Act.

   3. Build-to-rent properties must comply with any relevant affordable housing policies that may be imposed under the Environmental Planning and Assessment Act 1979 including any state environmental planning policies made from time to time to promote the development of new affordable housing and social housing.
   4. Dwellings in build-to-rent properties are exempt from Requirement 2.1(d), which states that build-to-rent properties must be managed by a single management entity with on-site access to management for tenants, if those specific dwellings are made available for use as affordable housing or social housing for a continuous period of 15 years.
   5. Build-to-rent dwellings must be made available to the general public, without restriction, apart from restrictions necessary to ensure public health and safety, to promote announced Government policy, or to ensure dwellings designated for affordable or social housing are used for that purpose.
3. Ownership structure requirements
   The dwellings and common land that comprise the build-to-rent property must be held within a unified ownership structure, which can include a group of entities holding joint ownership, and must not be held in such a way as to constitute, in the opinion of the Chief Commissioner, a de facto subdivision or divided ownership of the parcel of land, or is otherwise contrary to the intent of subsections 9E(9) and 9F(7) of the Act to restrict subdivision or division of the parcel of land.
4. Management structure requirements
   1. The dwellings that comprise the build-to-rent property must be managed by a single management entity, with on-site access to management for tenants.
   2. The management entity can be different to the landholder. That is, the landholder may outsource the provision of the management services, provided that the services are delivered by a single entity.
5. Lease condition requirements
   1. Each tenant must be provided a range of lease term choices, including a genuine option to enter into a fixed term lease of at least 3 years.

   Note: A landlord would not be in breach of this condition if a tenant who has been provided the option of a fixed term lease of at least 3 years opts for a lease of a shorter duration instead.

   2. Each tenancy must be subject to a Residential Tenancy Agreement under the Residential Tenancies Act 2010. The landlord must comply with all obligations under the Residential Tenancies Act 2010.
6. Other factors
   1. The Chief Commissioner may have regard to any other factors that the Chief Commissioner considers relevant in deciding whether a property is being used for build-to-rent.

Part 3 – Requirements for proportionate reductions in land value

3.1 Subsections 9E(7) and 9F(3) of the Act provide that, if the Chief Commissioner is satisfied that only part of a parcel of land is being used and occupied for a build-to-rent property under the relevant section, the reduction in land value (i.e. the tax concession) should be proportionately decreased in accordance with guidelines approved by the Treasurer. For example, a parcel of land with a build-to-rent property may also have shops. The land tax concession is to be decreased to account for these other uses.

3.2 A building, or part of a building, should not be considered as being used and occupied for a build-to-rent property under section 9F of the Act if the building has, at any time, been used and occupied for a purpose other than for a build-to-rent property under section 9F of the Act.

3.3 A parcel of land may be considered wholly used and occupied for a build-to-rent property where part of the parcel of land is used not for dwellings but is nonetheless for the purpose of the build-to-rent business. For example, reasonable accommodation for on-site management and facilities necessary to operate the build-to-rent business may form part of a build-to-rent property. The land tax concession will not be reduced.

3.4 In determining the appropriate decrease in the concession, the Chief Commissioner may consider the following:

1. The concession is to be reduced by an amount considered appropriate by the Chief Commissioner to reflect the proportion of the parcel of land being used and occupied for a build-to-rent property.
2. In determining the proportion of the parcel of land being used and occupied for a build-to-rent property, the Chief Commissioner may have regard to:
   1. The floor space allocated for build-to-rent purposes compared with the total floor space of the property,
   2. The proportion of land area occupied by buildings used exclusively as build-to-rent property compared with the proportion of land area used for other purposes, and
   3. Any other factors that the Chief Commissioner considers necessary to ensure that the tax concession is being provided in relation to build-to-rent property under the relevant section of the Act only and is not being provided to the extent that land is being used for other purposes.

Part 4 – Requirements for construction of buildings under section 9F of the Act

4.1 The construction of a building must satisfy the following conditions for the purposes of subsection 9F(2)(c)(iii) of the Act in order for the reduction in land value to apply.

Note: The construction of a build-to-rent property includes anything done at the construction site, including but not limited to designing, surveying and accounting that relates to the construction of the build-to-rent property.

1. Classes of workers requirements
   1. The construction of the building must involve or have involved work performed by persons who belong to one or more of certain classes of workers identified in Table 1.

Note: Table 1 also sets out how a worker will be determined to belong to any of the classes. The Chief Commissioner will determine the documents or other evidentiary materials that applicants for the concessions will need to provide in support of an application.

Table 1: Classes of workers

Part 5 – Restrictions on subdivision

One of the conditions for the reduction in land value is for the land to remain within a unified ownership structure for 15 years, as intended in subsections 9E(9) and 9F(7) of the Act. If the parcel of land is subdivided or the ownership of the parcel of land is otherwise divided, within the 15-year period after the land value was first reduced under the relevant section of the Act, the Chief Commissioner must reassess the land tax liability using the full value of the parcel of land for the year in which the land was subdivided and for each preceding year, back to and including the year in which the concession was first claimed.

5.1 The following scenarios provide further guidance on how the Chief Commissioner is to apply this part.

1. The 15-year restriction on subdivision for the relevant parcel of land starts when the tax concession first applied.
   1. For example, a parcel of land received the tax concession under section 9E of the Act in 2022 when Building A was used and occupied as a build-to-rent property. Subsequently, on an adjacent site, Building B is constructed and used and occupied as a build-to-rent property in 2026. If the owner consolidates the two parcels of land to receive the tax concession under section 9E of the Act, the owner can subdivide Buildings A and B from 2037.
2. Subdivision is permitted for parts of the parcel of land for which no concession has been received in any year.
   1. For example, a parcel of land has build-to-rent dwellings (the part of the parcel of land has received a tax concession), commercial shops and dwellings for sale (these parts of the parcel of land have not received any tax concession). Subdivision of the parcel of land to carve out the commercial shops and dwellings for sale (including dividing into individual units) is permitted.
3. Sale or transfer of the parcel of land that has a build-to-rent property is permitted, subject to satisfying the following conditions.
   1. Within 15 years from when the concession first applied to the parcel of land, the landowner is permitted to sell or transfer the parcel of land that has a build-to-rent property without being subdivided, or the ownership of the parcel of land otherwise divided. The new landowner is entitled to receive the land tax concession if the building continues to be used and occupied for a build-to-rent property purpose in accordance with these guidelines.
   2. If the new owner subdivides the land, or the ownership of the parcel of land is otherwise divided, within 15 years from when the concession first applied to the parcel of land, reassessment applies to all years. The new owner will be liable for the reassessed land tax, even for the years they did not own the property.

   Note: The new owner will not be entitled to the build-to-rent concession for surcharge purchaser duty or surcharge land tax. This is because the build-to-rent concession for surcharge purchaser duty and surcharge land tax only applies to the Australian corporation which constructed the build-to-rent building and therefore would not apply to a new owner who did not develop the build-to-rent building.

4. Subdivision of the parcel of land prior to the land being granted the tax concession is permitted. However, each subdivided parcel of land must meet the requirements of these guidelines.
   1. For example, if the owner has subdivided a building through a strata plan registration and, without having used and occupied the building for a purpose that is not build-to-rent, subsequently decides to operate the building as a build-to-rent property, a consolidation of the strata titles into a single parcel of land is needed so that it would meet the 50-dwellings requirement on the parcel of land.

¹Defined by the Australian Bureau of Statistics.