Land tax exemptions for ACT landlords using community housing providers

The ACT government has announced land tax exemptions for landlords whose investment properties are managed through a community housing provider, with legislation to come into effect for a pilot program next week.

This comes after amendments to the Land Tax Act were tabled in the ACT Legislative Assembly last week.

A maximum of 100 properties will be eligible for the exemption in the pilot period ending June 30, 2021. HomeGround Real Estate Canberra is currently seeking landlords to partake in the program.

Last August it was announced the ACT government would fund the affordable-rental real estate model, a social enterprise of Community Housing Canberra. HomeGround Real Estate Canberra is due to officially launch on May 9.

“Passage of this legislation is wonderful in that it supports the potential for the broader community to contribute to addressing rental affordability,” CHC chief executive Andrew Hannan said.

“Exemption from paying land tax on properties, coupled with the desire to make a real and meaningful difference to those in our community who may currently be in housing stress, we hope will be a great incentive for landlords to consider listing their rental properties with us.

“The challenge is now to ensure that the ACT government’s initial two-year pilot program is a roaring success so it continues on an ongoing basis.”

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CHC was awarded a $230,000 grant from the ACT government a part of the Housing Innovation Fund to establish the affordable-rental real estate agency.

Under the program, landlords will be required to rent their property out at 25 per cent below the market rate through a community housing provider and will be eligible for a full exemption on land tax.

But for some properties, a land-tax exemption is unlikely to subsidise the reduced rents. It will most likely benefit landlords in areas with high land taxes such as Canberra’s inner to middle suburbs.

The targeted tenants for the program are families who do not qualify for public housing and who have a combined household income in the bottom two income quintiles – less than $100,000 per annum. 

ACT government notes from the amendment bill read: “The Bill amends the Land Tax Act to insert a limited exemption for properties rented through a registered community housing provider.

“This is in line with ACT Housing Strategy to provide affordable community housing for people who do not qualify for public housing but are not able to enter the private rental market.”

According to Domain, Canberra has the highest weekly asking rents for houses at $560 per week. The vacancy rate in the nation’s capital is also one of the tightest at 0.8 per cent. 

SGS Economics and Planning’s Rental Affordability Index found low-income households in the ACT face the second-least affordable rents in the nation. 

Landlords interested in the program can email: enquiries@homegroundcanberra.com.au