The Australian Government has announced that it will introduce a 60 percent capital gains tax discount (CGT) for investors in affordable rental housing.
The Government has released draft legislation to implement a number of housing affordability policies.
From January 1, 2018, residents investing in eligible affordable housing will be entitled to a CGT discount of up to 60 percent if they hold the investment for at least three years. The standard discount rate is 50 percent.
The Government also intends to permit managed investment trusts (MITs) to invest in affordable housing. Effective July 1, 2017, MITs will be permitted to hold affordable housing for the purpose of deriving long-term rent, and to derive other eligible business income from investments including shares or commercial property. MITs will be allowed to construct or develop the affordable property within the MIT.
Consistent with current MIT withholding tax rules, eligible foreign residents will generally be able to take advantage of a reduced withholding tax of 15 percent on investment returns, including income from capital gains. However, this concessional rate will not apply to capital gains income derived from selling affordable housing held for less than 10 years.
However, from 16:30 AEST on September 14, 2017, MITs will not be permitted to acquire residential property, unless it qualifies as affordable housing. The aim is to prevent MITs from investing in houses, units, and apartments to hold for long term rent (other than affordable housing). It is also intended to clarify the long-standing convention that the primary purpose of the MIT concessional tax treatment is to apply to passive investment income.
MITs currently holding residential property will be provided with a transitional period until October 1, 2027, for their existing property assets.
To qualify for the higher discount and MIT concessional tax treatment, affordable housing tenancies will need to be managed by a registered Community Housing Provider. Housing providers will determine the tenant eligibility criteria, including the rent charged, consistent with state and territory affordable housing policies.
Switzerland and the United Kingdom signed a DTA Protocol on November 30, 2017.
According to an update from the Liechtenstein Government, the new DTA with the United Arab Emirates will become effective from January 1, 2018.
According to preliminary media reports, the Netherlands and Liechtenstein held a first round of DTA negotiations over three days ending November 17, 2017.
Saudi Arabia's Cabinet on November 28, 2017, authorized the signing of a DTA with Bulgaria.
Bahrain's Cabinet has approved the signing of a new DTA with Hong Kong, the state news agency said November 13, 2017.
Hong Kong announced on November 24, 2017, that its DTAs with Pakistan and Latvia had entered into force.
Finland on November 2, 2017, confirmed that a new DTA signed with Germany will be effective from January 1, 2018.
The DTA between Cyprus and Iran will become effective from January 1, 2018.
India ratified a third Protocol to its DTA with New Zealand on November 2, 2017, publishing a Notice in its Official Gazette.
Gibraltar and the United Kingdom are considering launching negotiations towards a DTA, according to recent comments from the UK's Economic Secretary to the Treasury.
Barbados and Italy have exchanged instruments of ratification in respect of a DTA, which will now become effective from January 1, 2018.
Switzerland's Government on October 25, 2017, adopted a dispatch on the DTA concluded with Pakistan, enabling its ratification.
Spain and Portugal signed a DTA on October 18, 2017.
Pakistan and Latvia initialed a DTA on October 25, 2017.
Spain and Romania signed a DTA on October 18, 2017.
Denmark and Japan signed a DTA Protocol on October 11, 2017.
The Bahamas and Finland signed a Protocol to amend their TIEA on October 19, 2017.
The Dutch lower house of parliament on October 24, 2017, approved the ratification of a DTA signed with Zambia.
Cyprus and Mauritius signed a DTA Protocol on October 23, 2017.
According to preliminary media reports, Armenia and Iran are to enter into negotiations to revise their DTA.
The United Kingdom and Ukraine signed a DTA Protocol on October 9, 2017.
According to preliminary media reports, Spain's Cabinet on October 6, 2017, approved the signing of a DTA and accompanying Protocol with Finland.
Russia and Japan signed a DTA on September 7, 2017.
A new TIEA between the Isle of Man and Turkey entered into force on October 7, 2017.
The United Kingdom and Belarus signed a DTA on September 26, 2017.