Sue Lines (President) | Hansard source

The question is that the remaining government amendment on sheet UD108 and the amendments on sheet PC122 be agreed to.

Government's circulated amendments to the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024

SHEET UD108

(1) Clause 2, page 3 (table item 10), omit the table item.

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SHEET PC122

(1) Schedule 1, item 9, page 9 (line 18), omit "3 years", substitute "5 years".

(2) Schedule 1, item 9, page 9 (line 18), after "or more", insert "in accordance with any requirements determined under subsection (1A)".

(3) Schedule 1, item 9, page 9 (line 21), omit "3 years", substitute "5 years".

(4) Schedule 1, item 9, page 9 (line 21), after "or more", insert "in accordance with any requirements determined under subsection (1A)".

(5) Schedule 1, item 9, page 10 (line 2), omit "3 years", substitute "5 years".

(6) Schedule 1, item 9, page 10 (after line 3), after subsection 43-153(1), insert:

(1A) For the purposes of subparagraphs (1)(a)(i) and (ii), the Minister may, by legislative instrument, determine requirements relating to the terms of the lease.

(1B) For the purposes of subparagraphs (1)(a)(i) and (ii), disregard a requirement determined under subsection (1A) if complying with that requirement would contravene a law of a State or Territory.

(7) Schedule 1, item 9, page 10 (lines 5 to 12), omit subsections 43-153(2) and (3), substitute:

(2) A *dwelling is an affordable dwelling if the requirements determined under subsection (3) in relation to the dwelling are met.

(3) For the purposes of subsection (2), the Minister must, by legislative instrument, determine requirements relating to a dwelling. Without limiting this subsection, the requirements may include requirements relating to:

(a) the rent payable under the lease for the dwelling; or

(b) the income of the tenant or prospective tenant.

(8) Schedule 1, item 9, page 12 (line 25), at the end of subsection 43-154(3), add:

; (c) if the event is the event mentioned in paragraph (1)(c) of this section—the entity that acquires the *ownership interest in the development.

(9) Schedule 1, item 11, page 14 (line 13), after "if a build to rent development", insert "you own".

(10) Schedule 1, item 11, page 14 (line 15), omit "your".

(11) Schedule 1, item 11, page 14 (line 16), after "withholding amounts", insert "(if any)".

(12) Schedule 1, item 11, page 15 (lines 13 to 21), omit subsection 44-20(2), substitute:

(2) For the purposes of subsection (1), the amount is the sum of:

(a) the amount that is the sum of your *build to rent capital works deduction amounts, worked out under section 44-25, for each *build to rent development to which subsection (3) of this section applies for the income year (if any); and

(b) the amount that is 10 times the sum of your *build to rent withholding amounts, worked out under section 44-30, for each build to rent development to which subsection (3) of this section applies for the income year (if any).

(3) For the purposes of paragraphs (2)(a) and (b), this subsection applies to a *build to rent development for an income year if:

(a) the build to rent development *ceases to be an *active build to rent development during the income year; and

(b) you owned the *dwellings of the build to rent development immediately before that cessation.

(13) Schedule 1, item 11, page 15 (line 26) to page 17 (line 27) (method statement), omit the method statement, substitute:

Method statement

Step 1. Identify each income year in which, at any time during the year, the *build to rent development was an *active build to rent development.

Step 2. For each of those years:

(a) identify each *construction expenditure area of capital works that are or include the *active build to rent development area of the *build to rent development at any time during the year; and

(b) calculate the amount worked out by the following formula for each construction expenditure area:

where:

active build to rent part, of the *construction expenditure area, is the part of the area that was the *active build to rent development area, or part of the active build to rent development area at any time during the year.

days used is the number of days in the income year that:

(a) any entity owned or was the lessee of the *active build to rent part and used it in the *4% build to rent manner; or

(b) any entity was the holder of the active build to rent part under a *quasi ownership right over land granted by an *exempt Australian government agency or an *exempt foreign government agency, and used it in the 4% build to rent manner.

portion of construction expenditure is the portion of *construction expenditure that is attributable to the *active build to rent part.

Step 3. Reduce the Step 2 amount for each *construction expenditure area, for each year, by the extent to which the *active build to rent part was used only partly for the *purpose of producing assessable income in the year.

Note: This step applies if:

(a) part of the income from the active build to rent part is exempt income; or

(b) part of the active build to rent part was not used for the purpose of producing assessable income or was not available for that use; or

(c) the active build to rent part was not used for such a purpose during a part of the days used period.

Step 4. For each year, add up the amounts worked out under Step 3 for each *construction expenditure area.

Step 5. Add up the Step 4 amounts for each year.

Step 6. Multiply the Step 5 amount by:

(a) if *you are a company (other than a company in the capacity of a trustee)—the *corporate tax rate for the income year in which the *build to rent development *ceases to be an *active build to rent development (the cessation year); or

(b) in any other case—the maximum rate specified in the table in Part I of Schedule 7 to the Income Tax Rates Act 1986 for the cessation year.

Step 7. Your build to rent capital works deduction amount is the Step 6 amount multiplied by 1.08.

Note: You can have more than one build to rent capital works deduction amount because there can be more than one build to rent development for which you have a build to rent capital works deduction amount.

(14) Schedule 1, item 11, page 18 (lines 1 to 24) (method statement), omit the method statement, substitute:

Method statement

Step 1. Identify each income year in which, at any time during the year, the *build to rent development was an *active build to rent development.

Step 2. For each of those years, identify each *fund payment made by the owner of the *active build to rent development, or each part of such a fund payment, (if any) that is referable to any of the following:

(a) a payment of rental income under a lease of a *dwelling of the active build to rent development;

(b) a *capital gain from a *CGT event in relation to a dwelling of the active build to rent development.

Note: For the purposes of this step, it does not matter whether an amount must be withheld from a fund payment under Part 2-5 in Schedule 1 to the Taxation Administration Act 1953.

Step 3. For each year add up the amounts of payments, or parts of payments, identified under Step 2.

Step 4. Add up the Step 3 amounts for each year.

Step 5. Your build to rent withholding amount is the Step 4 amount multiplied by 1.08.

(16) Schedule 1, item 25, page 25 (line 8), omit "Subject to subitem (2), the amendments", substitute "The amendments of section 43-145 of the Income Tax Assessment Act 1997".

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PARLIAMENTARY COUNSEL

Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024

PC122

Statement of reasons: why certain amendments should be moved as requests

Section 53 of the Constitution is as follows:

Powers of the Houses in respect of legislation

53. Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.

The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government.

The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.

The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications.

Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.

Amendment (13)

The effect of this amendment is to expand the definition of build to rent capital works deduction amount to include additional amounts. It is covered by section 53 because it will increase some entities' liability to build to rent development misuse tax.

Amendment (14)

The effect of this amendment is to expand the definition of build to rent withholding amount to include additional amounts. It is covered by section 53 because it will increase some entities' liability to build to rent development misuse tax.

Consequential amendments

The following amendment(s) are consequential on the amendments mentioned above: amendments (9), (10), (11), (12) and (15).

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

Amendments (13) and (14), and further consequential amendments

The bill deals with a number of taxes, including a 'misuse tax', which 'claws back' tax benefits where a 'build to rent operator' does not comply with eligibility requirements. The calculation of an entity's liability for the misuse tax is affected by the amounts deducted and consequently withheld under concessional arrangements provided for in the bill.

Amendment (13) would increase deductions available under the program, so that an operator that does not comply with eligibility requirements may be liable to repay an additional amount through the mechanism of the misuse tax. Amendment (14) has a similar effect in relation to withholding tax arrangements. In each case, additional benefits are made available that would have to be repaid by a non-compliant operator.

Although it appears that some entities may be liable for additional amounts of tax, this is not because the bill imposes tax, but because of changes to concessional arrangements.

The effect of section 53 of the Constitution is that any change proposed to a bill that imposes tax must be framed as a request. This requirement does not automatically extend to other bills dealing with taxation. In this regard, Odgers' Australian Senate Practice notes:

In relation to amendments which might increase tax payable, the constitutional provision refers to an amendment which would increase any proposed charge or burden, and the view taken in the Senate since 1903 is that a bill dealing with taxation does not contain a proposed charge or burden unless it is a bill imposing taxation. Amendments of this kind are therefore directed by the chair to be moved as amendments. [14th edition, p. 419]

The misuse tax, which may be affected by these amendments, is imposed by a separate bill, the Capital Works (Build to Rent Misuse Tax) Bill 2024.

It is therefore not in accordance with the precedents of the Senate for amendments (13) and (14), and their consequential amendments, to be framed as requests.