Land Tax Exemption Program.

Affordable housing scheme properties

  • Affordable rental housing includes homes in the private rental market and the community housing sector. These homes are offered for rent at a discounted rate of more than 25% on market rent for eligible tenants.
  • Affordable rent setting and tenant eligibility assessments.

    How do the tax incentives work?

       

      Land Tax Exemption

      If your property is being offered for rent at a rate that is a discount to market rent of more than 25%, and the tenant meets income eligibility requirements, you may fit the ACT Government’s criteria for a full land tax exemption.

      Example

      Market rent = $560/wk
      Affordable rent = $419.99/wk
      Rent forgone = $140/wk

      Land tax exemption benefit
      = $100/wk

      Before-tax cash flow impact for landlord
      = $140 - $100 = -$40/wk

      Revenue Legislation Amendment Bill 2019 and Land Tax (Affordable Community Housing) Determination 2019

      ATO Tax Ruling

      We have an ATO class ruling that may allow us to provide you with a tax deductible donation receipt for rent foregone by offering your property at below market rent. This would enable you to reduce your assessable income and your tax savings, dependant on your personal marginal tax rate.

      Example

      Landlord receives tax deductible donation receipt for the rent forgone at the end of year for 52 weeks x $140/wk = $7,280

      Assessable income reduced by $7,280
      Assumed personal marginal tax rate of 37%
      Tax savings = $2,694 ($52/wk)

      ATO Class Ruling CR2019/27

      Feel good

      The tax incentives mean that for a minimal impact to your hip-pocket, you can make a big difference to assist a household or family on low to moderate income. No matter which option suits you, the choice of tenant is always yours.

      Example

      Before tax cash flow = -$40/wk
      Tax savings = $52/wk
      After-tax cash flow impact for landlord = $12/wk

      Landlord saves eligible lower-income Canberran household $140/wk

      To read more, head to the ACT Govenment page Land Tax Exemption page

      Any reference to tax incentives, deductions, or financial benefits available through participation in affordable rental programs is general in nature and does not constitute financial or tax advice. The amount of tax incentives is dependant on the Land Tax Exemption and personal marginal tax rate. Property owners should seek independent advice from a qualified financial advisor, tax agent, or accountant to fully understand their individual circumstances and eligibility for any benefits, including but not limited to land tax exemptions, depreciation claims, or charitable deductions

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