The Western Australian Government has moved to strengthen support for the state’s emerging build-to-rent sector, introducing legislation to increase land tax exemptions for eligible developments from 50 per cent to 75 per cent.
The change, announced by the Government of Western Australia under Premier Roger Cook, is designed to reduce barriers to investment and accelerate the delivery of new rental housing across the state.
If passed by Parliament, the measure would represent the most generous land tax concession for build-to-rent projects in Australia, according to the State Government.
What Is Changing?
Under the proposed reforms, eligible new build-to-rent developments will receive a 75 per cent land tax exemption for a 10-year period following completion.
After that initial decade, the existing 50 per cent exemption would continue to apply for a further ten assessment years.
The qualifying window for projects to access the higher exemption has also been expanded. Developments completed between the 2025–26 and 2029–30 financial years will be eligible, extending the timeframe to five years.
Existing build-to-rent projects that are expanded prior to 2029–30 may also qualify for the increased exemption, provided they meet the relevant criteria.
The Government has indicated that, for a site with an unimproved land value of $10 million, the 75 per cent exemption could deliver savings of more than $1.5 million over the first ten years when compared with having no exemption in place.
Eligibility Requirements
To qualify, developments must meet the criteria under the current build-to-rent exemption settings. This includes:
- A minimum of 40 self-contained dwellings
- Dwellings made available for residential tenancy
- Three-year lease terms offered to tenants
The model differs from traditional apartment developments in that projects are retained under single ownership and operated as long-term rental communities rather than sold to individual purchasers.
Build-to-rent projects typically include professional on-site management and shared amenities, with the aim of providing longer-term housing stability and institutional-grade rental accommodation.
Government Rationale
Treasurer Rita Saffioti said the reform forms part of broader efforts to accelerate housing supply and ease pressure in Western Australia’s rental market.
“Our government is doing everything it can to accelerate housing supply, with build-to-rent developments key to delivering more affordable rentals across the State,” she said.
“These exemptions and our $75 million Build to Rent Kickstart Fund will support more developments to get off the ground sooner and help more Western Australians into a home.”
Finance Minister David Michael described the reform as a “sensible change” intended to boost investment and increase supply.
Housing and Works Minister John Carey added that the exemption would complement existing government-led projects and help attract private sector participation in the rental market.
The reform sits alongside the State’s $75 million Build to Rent Kickstart Fund, which provides concessional finance through Keystart to help catalyse private sector developments. The Government has confirmed that the expression of interest process for the fund has now closed following what it described as a strong response from industry.
The land tax changes also form part of the State’s broader $6.3 billion investment in housing and homelessness measures since 2021.
Build-to-Rent in Western Australia
While build-to-rent has gained traction in eastern states over recent years, the model remains relatively new in Western Australia.
In markets such as New South Wales and Victoria, institutional investors including superannuation funds and global property groups have increasingly backed large-scale rental projects, attracted by long-term income streams and housing demand fundamentals.
In Western Australia, uptake has been slower, with developers and financiers often citing taxation settings and scale as barriers to viability.
By increasing the land tax exemption to 75 per cent, the State Government is signalling an intent to position Western Australia as a competitive jurisdiction for build-to-rent investment.
Industry observers note that land tax can materially affect feasibility in high-value urban locations, particularly for projects held under single ownership rather than subdivided and sold.
Reducing the tax burden may improve project returns and help unlock institutional capital that has previously been cautious about entering the WA market.
Rental Market Context
The reform comes amid ongoing rental market pressure across Western Australia.
Vacancy rates in Perth have remained tight in recent years, while population growth and interstate migration have contributed to rising demand for rental housing.
The build-to-rent model is viewed by some policymakers as one tool among many to increase supply, particularly in well-located urban areas where higher-density housing is feasible.
However, build-to-rent is not a replacement for broader housing supply initiatives, including greenfield development, social housing construction, and planning reform. Rather, it is positioned as an additional pathway to diversify rental stock and attract private investment into long-term rental supply.
Potential Impact on the Development Sector
For developers, the expanded exemption may improve feasibility modelling, particularly on larger apartment projects where holding the asset long term can deliver steady income but carries different risk profiles compared with traditional build-to-sell developments.
The 10-year 75 per cent exemption provides a defined period of reduced holding costs during the early operational years, which are often critical to stabilising occupancy and income streams.
From a financing perspective, clearer and more generous tax settings may also support lender confidence, particularly where projects are backed by institutional capital.
The expanded qualifying period through to 2029–30 offers additional certainty for projects currently in planning or pre-construction stages.
Considerations and Next Steps
Legislation to implement the higher exemption is set to be introduced to Parliament. Subject to passage, the changes would apply to eligible projects completed within the specified timeframe.
Developers considering the build-to-rent model will need to assess eligibility requirements carefully, including lease term obligations and minimum dwelling thresholds.
As with similar concessions in other jurisdictions, compliance and reporting obligations are likely to form part of the exemption framework.
While the increased exemption is positioned as the most generous nationally, long-term uptake will ultimately depend on broader market conditions, including construction costs, interest rates, planning pathways, and tenant demand.
A Broader Housing Strategy
The land tax reform sits within a wider suite of housing measures designed to increase supply and improve affordability outcomes in Western Australia.
Alongside the Build to Rent Kickstart Fund and infrastructure investments, the Government continues to focus on social housing delivery, planning reform, and support for first home buyers.
Whether the enhanced land tax exemption will materially accelerate build-to-rent development remains to be seen. However, the policy shift represents a clear attempt to make Western Australia more competitive in attracting institutional capital to the rental housing market.
As the state continues to grapple with housing demand pressures, build-to-rent is likely to remain part of the broader policy conversation around how to ensure more Western Australians have access to secure, long-term housing.
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