Build-to-rent not all it’s built up to be

Article published 11 August 2020

Subscribe to CPSA news

Despite action by the NSW Government, build-to-rent properties are generally not affordable for older renters on low incomes. The most recent build-to-rent project in Sydney’s Olympic Park costs $85 a week more in rent than a similar property in the normal private rental market and would leave a single pensioner with less than a dollar a day to live on.

Build-to-rent properties often provide better quality housing and more secure tenure for renters. However, this comes at a cost. To lower the cost of build-to-rent properties, the NSW Government will halve land tax for the next 20 years for developments started on or after 1 July 2020.

Currently, a one-bedroom build-to-rent unit in Sydney’s Olympic Park starts at $535 per week. Estimating the land tax at premium rates for this apartment, assuming it is one of fifty in a block on a land surface of 4,000 square metres valued at $4 million, the total land tax would be $80,000 annually overall, or $1,600 annually per apartment. The NSW Government’s discount reduces this to $800. If this discount is used solely to reduce the weekly rent of an apartment, the rent decreases from $535 per week by $15 to just under $520 a week.

Currently, single pensioners pay 25 per cent of their pension to live in social housing in NSW. That comes to around $111 a week. Apply CRA and the weekly rent is $76.

Clearly, land tax cuts alone will not only fail to reduce the rent of build-to-rent properties, they will not materially make rents more affordable to anybody.

In the US and Europe, Governments have provided funding to make build-to-rent housing secure and affordable. Governments in Australia need to step up. One way of doing that is by building more social housing. That, surely, is a more effective way of meeting the demand for affordable and secure housing than by giving tax breaks to developers for build-to-rent housing.

For more information please email our media contact at

Stay up to date with CPSA news and media releases

Our regular email newsletter provides valuable insights and information on topics such as pension entitlements, healthcare, government policies, and more.

  • This field is for validation purposes and should be left unchanged.