The 2017 Budget (9 May 2017) announcements contained measures designed to improve Australians’ access to a home at affordable cost.
The measures include:
Capital Gains Tax
From 1 January 2018, for resident individuals investing in qualifying affordable housing, the CGT discount is increased from 50% to 60%. The additional 10% prorated based on periods of qualifying use.
Residents are otherwise taxed at their marginal rate.
Non-residents continue to be ineligible for any CGT discount, but are eligible (subject to qualifying conditions) for concessional withholding tax rates on investment income through an MIT.
Managed Investment Trusts
From 1 July 2017 MITs can acquire, construct or redevelop property to hold for affordable housing and still be eligible for tax concessions.
Non-resident MIT investors
The non-resident concessional final withholding tax rate on all investment returns (income and capital gains) is 15%.
However the rate will be 30% for
- non-residents of non-recognised information-sharing countries
- capital gains earned through MITs which do not make affordable housing available for at least 10 years
- all income and gains in any year in which MIT does not earn at least 80% of income from affordable housing
- Government Fact Sheet: Boosting affordable housing for Australians through investment tax incentives
- Treasury draft legislation and consultation: Increasing the supply of Affordable Housing
This page was last modified 2017-12-08