Overseas investors and depreciation deductions are two ways the National Party aims to get Build to Rent off the ground, earning praise from Property Council New Zealand
Build-to-Rent developments typically consist of multi-unit residential developments within walking distance of key transport links. The developments are professionally managed, with great amenities and offer residents a variety of lifestyle options as well as unique security of tenure to tenants.
“Build-to-Rent developments are an important part of housing markets in countries we like to compare ourselves to, but remain rare in New Zealand,” says National’s Housing spokesperson Chris Bishop says.
“If National is elected to govern this year, we will move quickly to make two legislative changes to help make Build-to-Rent developments get off the ground in this country.
“We will do this by amending the Overseas Investment Act to give greater certainty for institutional investors to invest in New Zealand’s Build-to-Rent market. We need both domestic and international capital to help us house Kiwis.
“Retirement homes, rest homes and student accommodation have an easier ride through the Overseas Investment Act than Build-to-Rent developments. We will make sure they are treated the same.
“National will also change the Income Tax Act to ensure that Build-to-Rent developments are eligible for depreciation deductions like other commercial buildings.
“Reintroducing interest deductibility for new Build-to-Rent developments was a good step forward, but further changes are required.”
Property Council New Zealand chief executive Leonie Freeman welcomes the announcement and says it fills the missing pieces of the Build to Rent puzzle.
“Changes to the Overseas Investment Act and allowing depreciation benefits, similar to commercial buildings, would mean this exciting housing solution will be enabled at scale.
“Build to Rent is a new type of ‘commercial living’ typically located in city centres within walking distance of key transport links. Tenants have the option to stay as long as they want in multi-unit, professionally managed, quality homes that offer a range of amenities and bespoke lifestyle options.
“We’ve been lagging behind the rest of the world in embracing this market-changing concept and I can only hope we see the phenomenal growth other countries are experiencing here on our shores,” says Freeman.
“Build to Rent will transform the experience of renting in New Zealand. Property Council research shows that our members stand poised to deliver over 25,000 Build to Rent homes in the next decade, with the right policy settings, changes to the OIA and allowing depreciation the key to unlocking this growth.
“We acknowledge the current government for recognising the potential of Build to Rent, with legislation currently in Parliament which enables Build to Rent to be classified as its own asset class, similar to retirement villages or student accommodation. But we would also encourage the Labour caucus to match the National Party’s commitment to maximise the certainty for potential Build to Rent investors.
“With political courage, the property sector will be able to deliver thousands of new high-quality, high-density rental houses, supporting New Zealand’s urban intensification and climate ambitions.”