{"id":"C2024A00112","name":"Capital Works (Build to Rent Misuse Tax) Act 2024","slug":"capital-works-build-to-rent-misuse-tax-act-2024","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"112 of 2024","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":436413,"registerId":"C2024A00112-fast-fetch-1775953616371","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Capital Works (Build to Rent Misuse Tax) Act 2024","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n![Commonwealth Coat of Arms of Australia](image.001.png)\n\n \n\n \n\n \n\n \n\n \n\n \n\nCapital Works (Build to Rent Misuse Tax) Act 2024\n\nNo. 112, 2024\n\n \n\n \n\n \n\n \n\n \n\nAn Act to impose tax on certain build to rent developments, and for related purposes\n\n \n\n \n\n \n\nContents\n\n1 Short title\n\n2 Commencement\n\n3 Definitions\n\n4 Imposition of tax\n\n5 Amount of tax\n\n \n\n![Commonwealth Coat of Arms of Australia](image.002.png)\n\n \n\n \n\nCapital Works (Build to Rent Misuse Tax) Act 2024\n\nNo. 112, 2024\n\n \n\n \n\n \n\nAn Act to impose tax on certain build to rent developments, and for related purposes\n\n[Assented to 10 December 2024]\n\nThe Parliament of Australia enacts:\n\n1  Short title\n\n  This Act is the Capital Works (Build to Rent Misuse Tax) Act 2024.\n\n2  Commencement\n\n (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provisions Commencement Date/Details\n- 1. The whole of this Act The first 1 January, 1 April, 1 July or 1 October to occur after the day this Act receives the Royal Assent. 1 January 2025\n\n\nNote: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.\n\n (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.\n\n3  Definitions\n\n  In this Act:\n\nbuild to rent misuse amount has the same meaning as in the Income Tax Assessment Act 1997.\n\nincome year has the same meaning as in the Income Tax Assessment Act 1997.\n\n4  Imposition of tax\n\n  Tax payable under section 44‑15 of the Income Tax Assessment Act 1997 is imposed.\n\n5  Amount of tax\n\n  The amount of tax is 1.5% of the build to rent misuse amount for the income year.\n\n[Minister’s second reading speech made in—\n\nHouse of Representatives on 5 June 2024\n\nSenate on 28 November 2024]\n\n(64/24)\n\n \n\n \n\n \n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":2,"scope_assessment":{"changed":false,"description":"This legislation remains tightly scoped to its original purpose. It is a constitutional mechanism to impose a specific penalty tax on build to rent misuse, deliberately narrow in design. The substantive policy rules remain in the Income Tax Assessment Act 1997 where they were originally placed."},"complexity_factors":["Extremely short: only 5 operative sections across 2 pages","Minimal defined terms: only 2 definitions in section 3, both referencing external legislation rather than creating new concepts","No conditional logic or exceptions within the Act itself — all substantive rules (who pays, when, how to calculate the 'misuse amount') are outsourced to the Income Tax Assessment Act 1997","Single, flat tax rate (1.5%) with no tiers, thresholds, or calculations required in this instrument","No cross-references to other Acts beyond the single reference to ITAA 1997","Purpose-built as a 'machinery' or 'imposition' Act — its sole function is to satisfy constitutional requirements for taxing legislation (section 55 of the Constitution) by separately imposing the tax"],"plain_english_summary":"This law creates a new tax penalty for property developers who misuse 'build to rent' tax concessions.\n\n**What it does:**\n- **Imposes a 1.5% tax** on what the law calls a 'build to rent misuse amount' — essentially, money that developers wrongly claimed as tax deductions or offsets through the build to rent scheme.\n- The tax applies when developers break the rules of the build to rent program (for example, by selling the property too soon or not keeping it as genuine rental housing for the required period).\n\n**Who it affects:**\n- Property developers and investors who claimed tax benefits under Australia's 'build to rent' housing scheme but then breached the conditions.\n- The Australian Taxation Office (ATO), which collects this penalty tax.\n\n**Why it matters:**\nThe government introduced 'build to rent' tax breaks to encourage more rental housing supply. But if developers claim these benefits and then flip the properties for sale or otherwise misuse the concessions, this tax acts as a **financial penalty** — clawing back some of the benefit at a rate of 1.5% per year on the misused amount. It's designed to keep developers honest and ensure the policy actually creates long-term rental housing, not just short-term tax arbitrage.\n\n**How it works in practice:**\n- The actual rules about what counts as 'misuse' are defined in the *Income Tax Assessment Act 1997* (the main tax law).\n- This Act simply **creates the legal power to charge the tax** and sets the rate at 1.5%.\n- It started on **1 January 2025**."},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The Act, as enacted, sets out a single‑purpose tax: imposing 1.5% on the build to rent misuse amount defined in the Income Tax Assessment Act 1997 (s.3–5). The text contains no indication that its scope was narrowed or broadened relative to its stated effect; it neither amends other Acts nor adds exemptions or administrative deviations from the ITAA cross‑references."},"complexity_factors":["Heavy reliance on cross‑references to the Income Tax Assessment Act 1997 for key definitions (s.3) and the payment mechanism (s.4), requiring users to consult another Act.","Simple, single fixed rate (1.5%) makes the arithmetic straightforward (s.5).","Narrow subject matter and few provisions reduce textual complexity (whole Act is 5 sections).","Limited administrative detail in this Act about collection, timing or enforcement shifts implementation questions to the referenced ITAA provisions (s.4).","Commencement timing uses a rolling quarterly rule but a definite operative date is provided (s.2), which is minor procedural complexity."],"plain_english_summary":"This Act imposes a new tax equal to 1.5% of the \"build to rent misuse amount\" for each income year, using the definition in the Income Tax Assessment Act 1997 (s.3–5). It applies to any taxpayer who has a build to rent misuse amount and takes effect from 1 January 2025 (s.2). The legal obligation and calculation rely on cross‑references to the Income Tax Assessment Act rather than creating new definitional or administrative rules."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/capital-works-build-to-rent-misuse-tax-act-2024","history":"/api/acts/capital-works-build-to-rent-misuse-tax-act-2024/history","analysis":"/api/acts/capital-works-build-to-rent-misuse-tax-act-2024/analysis","conflicts":"/api/acts/capital-works-build-to-rent-misuse-tax-act-2024/conflicts","importantCases":"/api/acts/capital-works-build-to-rent-misuse-tax-act-2024/important-cases","documents":"/api/acts/capital-works-build-to-rent-misuse-tax-act-2024/documents"}}