Capital Gains Tax Discount
Whether your investment property is NRAS or market rental, as an Investor who has entrusted the management of your investment property to Horizon Housing Realty (HHR), you already contribute to improving affordability for everyday Australians, as HHR donates all our profits into affordable housing initiatives via our parent company Community Housing Limited (CHL).
If you would like to further support the provision of affordable housing, you may wish to find out more about the Australian Government’s additional CGT discount for affordable housing.
When owners sell a property that is used to provide affordable rental housing, owners may be eligible to reduce their capital gains tax (CGT) by up to 10% more than the 50% discount. This may increase the maximum capital gains discount percentage on their sale from 50% up to 60%.
To qualify for the affordable housing CGT discount, an owner must rent their property as affordable housing for a minimum of 3 years from the later of 1 January 2018 or the time they acquired it, and management of the tenancy must be done exclusively by a registered community housing provider (CHP).
To see the full list of requirements for property eligibility and more information, please refer to the ATO CGT discount for affordable housing page.
A property is not eligible for the affordable housing CGT discount whilst it is part of the NRAS. Owners may however wish to consider continuing the rental of their property at affordable housing rent once their NRAS allocation ends commence the 3-year eligibility period for the CGT discount.
How can Horizon Housing Realty help?
HHR’s parent entity, Community Housing Limited (CHL), is a registered CHP. Should owners wish to utilise their investment property to provide affordable housing and potentially be eligible in the future for the additional CGT discount, they can enter into a management agreement with our parent company CHL. CHL will contract the property management responsibilities to HHR.
As part of the CHP reporting obligations, CHL will send owners an annual affordable housing certificate which, subject to all other qualifying conditions, may enable them to confirm the eligibility of the property for the affordable housing CGT discount when they sell their property in the future.
HHR has extensive experience in the management of affordable housing, with established policies and procedures and transparent processes for comparative market analysis, rent setting in accordance with the classification of affordable housing and tenant selection.
After receiving a rental valuation, rents will be set at 80% of the market rent.
If you would like further information on how HHR can assist you in the provision of affordable housing to your tenants, please contact us hhrenquiries@horizonhrl.com.au
This material has been prepared for factual informational purposes only and is not intended to provide, and should not be relied on for, financial, tax, legal or accounting advice. This material does not constitute the application or interpretation of any laws (tax or otherwise) to your personal circumstances. You should consult your own financial, tax, legal and accounting advisors before making any decisions. Neither HHR nor any of its affiliates are responsible or liable for any loss, damage, increased taxation, interest or penalties caused in any way resulting from the use of this material.