Call for govt to incentivise build-to-rent developments

PHOTO: RNZ / Nate McKinnon

An advocate for build-to-rent apartment complexes is urging the government to offer incentives in next week’s Budget to support large scale developments.

Grant Thornton partner, and property & construction leader, Dan Lowe said build-to-rent could help address New Zealand’s severe shortage of quality, affordable rentals, but will require some law changes to support investment.

He said a specific asset class could be carved out for rental communities, just as those which exist for student accommodation and retirement villages.

The incentives would include perpetual interest deductibility and claimable depreciation.

“The good news is people are presenting solutions, but they need some impetus and support from the government to deliver these large-scale developments,” Lowe said.

“Creating a stable, positive rental environment would be an outstanding result for the future of the 35 percent of Kiwi households currently renting – a number that’s only likely to rise.”

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He said foreign pension schemes were always on the lookout for longer term investments, such as build-to-rent developments.

“Whether they are subdivisions or apartment blocks, the construction of complexes like these would inject massive numbers of jobs and cash into our economy.”