An exemption from the interest limitation rules to certain types of new and existing build-to-rent developments will apply retroactively from October 1, 2021
To qualify, developments need to offer tenants leases of at least 10 years, Housing Minister Megan Woods says.
Property Council New Zealand has come out in support of the announcement.
Chief Executive Leonie Freeman says her members share the government’s view that enabling Build to Rent will provide warm, dry rental homes that offer Kiwis long-term security of tenure.
“Build to Rent refers to multi-unit residential developments, typically located in city centres within walking distance of key transport links. These developments are professionally managed, with brilliant amenities available onsite, offering residents bespoke lifestyle options for as long as they want to stay.”
Build to Rent is the fastest growing residential sector in the world, with the potential to support New Zealand’s urban intensification and climate ambitions, Freeman says.
“Over the past 18 months, Property Council has been working closely with the government to highlight the untapped potential of Build to Rent and explain the legislative actions required to enable it. As part of this, we have collaboratively resolved the unintended consequences of last year’s interest deductibility changes.
“It is encouraging to see that the government has listened to our sector and acknowledged Build to Rent as a unique property asset class. The government’s announcement is a major step towards boosting New Zealand’s emerging Build to Rent sector.
“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,” Freeman says.
“While today’s announcement has been a fantastic step in the right direction, there are a few remaining speedbumps to truly unlock the concept.
“For Build to Rent to flourish, access to large institutional investment via the overseas investment act and commercial depreciation is also required.”
