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

Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 No. 138, 2024 An Act to amend the law relating to taxation, consumer credit, the Medicare levy and federal financial relations, and for related purposes Contents 1 Short title 2 Commencement 3 Schedules Schedule 1—Build to rent developments Income Tax Assessment Act 1936 Income Tax Assessment Act 1997 Taxation Administration Act 1953 Schedule 2—Buy now, pay later Part 1—Extending the application of the National Consumer Credit Protection Act 2009 National Consumer Credit Protection Act 2009 Part 2—Responsible lending conduct National Consumer Credit Protection Act 2009 Part 3—Credit representatives National Consumer Credit Protection Act 2009 Part 4—Precontractual disclosure National Consumer Credit Protection Act 2009 Part 5—Contract documents and statements of account National Consumer Credit Protection Act 2009 Part 6—Increasing credit limits National Consumer Credit Protection Act 2009 Part 7—Interest rates and comparison rates National Consumer Credit Protection Act 2009 Part 8—Default notices National Consumer Credit Protection Act 2009 Part 9—Avoidance schemes National Consumer Credit Protection Act 2009 Part 10—Giving information or documents National Consumer Credit Protection Act 2009 Schedule 3—Medicare levy exemption for lump sum payments Medicare Levy Act 1986 Schedule 4—Multinational tax transparency—country by country reporting Taxation Administration Act 1953 Schedule 5—Deductible gift recipients Part 1—Main amendments Income Tax Assessment Act 1997 Part 2—Contingent amendments Income Tax Assessment Act 1997 Schedule 6—National skills and workforce development payments Part 1—Amendments Federal Financial Relations Act 2009 Part 2—Application and saving provisions Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 No. 138, 2024 An Act to amend the law relating to taxation, consumer credit, the Medicare levy and federal financial relations, and for related purposes [Assented to 10 December 2024] The Parliament of Australia enacts: 1 Short title This Act is the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024. 2 Commencement (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. Commencement information Column 1 Column 2 Column 3 Provisions Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 10 December 2024 2. Schedule 1 At the same time as the Capital Works (Build to Rent Misuse Tax) Act 2024 commences. 1 January 2025 However, the provisions do not commence at all if that Act does not commence. 3. Schedule 2, Part 1 The day after this Act receives the Royal Assent. 11 December 2024 4. Schedule 2, Parts 2 to 10 A single day to be fixed by Proclamation. However, if the provisions do not commence within the period of 6 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period. 5. Schedules 3 and 4 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 6. Schedule 5, Part 1 The day after this Act receives the Royal Assent. 11 December 2024 7. Schedule 5, item 13 The later of: 11 December 2024 (a) the start of the day after this Act receives the Royal Assent; and (paragraph (a) applies) (b) immediately after the commencement of item 1 of Schedule 3 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024. However, the provision does not commence at all if the event mentioned in paragraph (b) does not occur on or before the day after this Act receives the Royal Assent. 8. Schedule 5, item 14 The day after this Act receives the Royal Assent. Never commenced However, the provision does not commence at all if item 1 of Schedule 3 to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 commences on or before that day. 9. Schedule 6 The day after this Act receives the Royal Assent. 11 December 2024 Note: 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. (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. 3 Schedules Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Build to rent developments Income Tax Assessment Act 1936 1 Subsection 170(10AA) (after table item 15) Insert: 17 The cell, of the table in subsection 43‑145(1), dealing with use in the 4% build to rent manner Deductions for capital works relating to build to rent developments Section 43‑237 Income Tax Assessment Act 1997 2 Section 12‑5 (table item headed "buildings") Before: income producing buildings, capital allowances ...... Division 43 insert: build to rent development misuse tax, no deduction for .. 26‑99B 3 After section 26‑99A Insert: 26‑99B Build to rent development misuse tax cannot be deducted You cannot deduct under this Act an amount of *build to rent development misuse tax that you pay. 4 Group heading before section 43‑140 Repeal the heading, substitute: Using your area 5 Section 43‑145 Before "You use a", insert "(1)". 6 Section 43‑145 (table item dealing with Time period 1: After 30/6/97) After: You use the part of *your area for the *purpose of producing assessable income, and that part is used by any entity: (a) wholly or mainly for *industrial activities; or (b) to provide meal rooms, rest rooms, first aid rooms, change rooms or similar facilities that are wholly or mainly for use by: (i) workers employed wholly or mainly to undertake the work directly involved in carrying out industrial activities; or (ii) the immediate supervisors of those workers; or (c) wholly or mainly as office accommodation for the immediate supervisors of those workers. insert: You use the part of *your area in the *4% build to rent manner. 7 At the end of section 43‑145 Add: (2) You use a part of *your area in the 4% build to rent manner if: (a) you use the part of your area for the *purpose of producing assessable income; and (b) that part is, or is part of, an *active build to rent development area (the eligible development); and (c) if the *build to rent compliance period for each of the *dwellings in the eligible development has ended: (i) no other entity is using the eligible development, or any part of the eligible development, for the purpose of producing assessable income; and (ii) at each earlier time (if any) at which you or another entity used the eligible development, or any part of the eligible development, for the purpose of producing assessable income and at which the eligible development was an *active build to rent development, no other entity was using the eligible development, or any part of the eligible development, for the purpose of producing assessable income. (3) For the purposes of paragraph (2)(c), disregard use of the eligible development, or any part of the eligible development, for the *purpose of producing assessable income by providing management services. 8 Before section 43‑150 Insert: Industrial activities 9 At the end of Subdivision 43‑D Add: Build to rent developments 43‑151 Meaning of active build to rent development area (1) An active build to rent development area is a part of a building comprising any of the following: (a) the *dwellings of an *active build to rent development; (b) any *common areas for those dwellings. (2) An active build to rent development is a *build to rent development that has: (a) *commenced to be an active build to rent development (see subsections 43‑152(1) and (2)); and (b) not *ceased to be an active build to rent development (see subsection 43‑152(4)). (3) A common area for *dwellings of a *build to rent development is an area, facility or amenity: (a) intended for use for the purposes of those dwellings; or (b) intended for use for the purposes of those dwellings and any other dwellings in the same building. 43‑152 Build to rent developments Commencement (1) On and after the first day on which a building has 50 or more *dwellings: (a) that satisfy subsection 43‑153(1); and (b) that the owner of the dwellings chooses to form a *build to rent development in accordance with subsection (6) of this section; those dwellings are a build to rent development, of the building, that commences to be an *active build to rent development on that day. (2) Also, on and after the first day (if any): (a) after the most recent instance of a *build to rent development of a building *commencing to be an *active build to rent development; and (b) on which the building has 50 or more *dwellings: (i) that satisfy subsection 43‑153(1); and (ii) that were not part of a build to rent development just before that day; and (iii) that the owner of the dwellings chooses to form a build to rent development in accordance with subsection (6) of this section; those dwellings are a build to rent development, of the building, that commences to be an active build to rent development on that day unless an active build to rent development *expands under subsection (3) on that day to include the dwellings. Expansion (3) If a building has a *build to rent development (the existing development) that has *commenced to be an *active build to rent development, on the first day (if any) on which the building has *dwellings (the new dwellings): (a) that taken together with the dwellings of the existing development for which the *build to rent compliance period has not ended, satisfy subsection 43‑153(1); and (b) that are not already a part of a build to rent development; and (c) that the owner of the dwellings chooses to form part of the existing development in accordance with subsection (6) of this section; the existing development expands to comprise: (d) the dwellings of the existing development; and (e) the new dwellings. Cessation (4) A *build to rent development ceases to be an *active build to rent development if the dwellings of the active build to rent development for which the *build to rent compliance period has not ended cease to satisfy subsection 43‑153(1). Build to rent compliance period (5) The build to rent compliance period for a *dwelling of an *active build to rent development is the 15 years beginning on the day after the day on which: (a) unless paragraph (b) applies—the development *commences to be an active build to rent development; or (b) if: (i) the dwelling is not part of the development when it commences to be an active build to rent development; but (ii) the development *expands to include the dwelling; the development expands to include the dwelling. (6) To make a choice for the purposes of paragraph (1)(b), subparagraph (2)(b)(iii) or paragraph (3)(c) in respect of *dwellings, the owner of the dwellings must: (a) make the choice in the *approved form; and (b) give it to the Commissioner. (7) The choice is taken to be made on the following day: (a) if: (i) the owner nominates a day in the choice; and (ii) the Commissioner receives the choice before the nominated day; the nominated day; or (b) otherwise—the day the Commissioner receives the choice. 43‑153 Build to rent developments—eligibility (1) For the purposes of section 43‑152, *dwellings of a building satisfy this subsection at a particular time if, at that time: (a) each of the dwellings is: (i) available to the public to be tenanted by way of lease for a period of 5 years or more in accordance with any requirements determined under subsection (1A); or (ii) being tenanted by way of lease as a result of being made available to the public to be tenanted by way of lease for a period of 5 years or more in accordance with any requirements determined under subsection (1A); and (b) all of the dwellings are: (i) *residential premises; and (ii) *taxable Australian real property; and (iii) not *commercial residential premises; and (c) all of the dwellings and *common areas for the dwellings are owned by a single entity; and (d) the number of the dwellings that are *affordable dwellings is equal to or greater than: (i) 10% of the number of the dwellings; or (ii) if the number of dwellings worked out under subparagraph (i) is not a whole number—that number rounded down to the nearest whole number of dwellings; and (e) subsection (5) applies to each of the affordable dwellings. Note: For the purposes of paragraph (a), a lease is still offered to the public for a period of 5 years or more even if a prospective tenant subsequently requests and the lessor accepts a shorter lease. (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. Affordable dwellings (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. (4) A reference in paragraph (1)(a) to the public in relation to a lease of a *dwelling is taken to be a reference to a segment of the public if: (a) the dwelling is an *affordable dwelling; and (b) requirements determined under subsection (3) require that the dwelling be tenanted, or be available to be tenanted, only to that segment of the public. (5) For the purposes of paragraph (1)(e), this subsection applies in relation to an affordable dwelling (the test dwelling) if: where: number of comparable affordable dwellings means the number of the dwellings (including the test dwelling) that: (a) are *affordable dwellings; and (b) have the same number of bedrooms as the test dwelling; and (c) have a floor area that is at least equal to the floor area of the test dwelling, but does not exceed 110% of that floor area. number of comparable non‑affordable dwellings means the number of the dwellings that: (a) are not *affordable dwellings; and (b) have the same number of bedrooms as the test dwelling; and (c) have a floor area that is at least equal to the floor area of the test dwelling, but does not exceed 110% of that floor area. Eligibility during construction (6) Dwellings of a building are taken to satisfy subsection (1) at a particular time if: (a) one or more of the dwellings is not tenanted, and not available to be tenanted, at that time as mentioned in paragraph (1)(a) because of: (i) construction of an extension, alteration or improvement to any of the dwellings or the building; or (ii) the making of repairs to any of the dwellings or the building; and (b) the dwellings satisfied subsection (1) just before paragraph (a) of this subsection began to apply; and (c) it is reasonable to expect that the dwellings will satisfy subsection (1) when the construction or repairs are completed. Commissioner's discretion (7) The Commissioner may determine that *dwellings of a building are taken to satisfy one or more of paragraphs (1)(a), (d) and (e) (the eligibility criteria) at all times during a particular period, if: (a) the entity that owns the dwellings applies to the Commissioner in the *approved form; and (b) the Commissioner is satisfied of the following: (i) the dwellings did not otherwise satisfy the eligibility criteria at all times during the period due to events outside the control of the entity; (ii) the entity took all reasonable steps to ensure that the dwellings would satisfy the eligibility criteria as soon as practicable; (iii) at the time of the determination, the dwellings satisfy the eligibility criteria; (iv) at the time of the determination, the entity intends that each dwelling will satisfy subsection (1) for the remainder of its *build to rent compliance period. (8) A determination made under subsection (7) has effect according to its terms. 43‑154 Notice of events (1) If any of the following events happen in relation to a *build to rent development, each entity to which subsection (3) applies must notify the Commissioner of the event: (a) the development *commences to be an *active build to rent development; (b) the development *expands; (c) the *ownership interest in the development is acquired by another entity; (d) the development *ceases to be an active build to rent development. (2) The notice must be: (a) in the *approved form; and (b) given no later than 28 days after the event. (3) This subsection applies to the following entities: (a) the owner of the development at the time just before the event happens; (b) if in the income year in which the event happens, an entity is required to notify the Commissioner under subsection 16‑150(4) in Schedule 1 to the Taxation Administration Act 1953 of an amount to which subsection 12‑450(5) in that Schedule applies, to any extent, because of a *dwelling of the development—the entity; (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. 43‑154A References to buildings A reference in sections 43‑151 to 43‑153 to a building includes a reference to any other buildings that are on the same or adjacent land. 10 After section 43‑235 Insert: 43‑237 Post‑26 February 1992 undeducted construction expenditure—modification for active build to rent developments that have ceased (1) This section applies if: (a) a part of *your area was an *active build to rent development area; and (b) on a day (the cessation day) in the income year or a prior income year, the *active build to rent development of the active build to rent development area *ceases to be an active build to rent development. (2) Section 43‑235 applies to the part as if for each day in the use period: (a) before the cessation day; and (b) that the part was an *active build to rent development; you did not use the part in the *4% manner. 11 After Division 43 Insert: Division 44—Build to rent development misuse tax Table of Subdivisions Guide to Division 44 44‑A Object of this Division 44‑B Build to rent development misuse tax 44‑C When tax is payable Guide to Division 44 44‑1 What this Division is about This Division removes certain tax concessions for build to rent developments when they cease to be active build to rent developments. Subdivision 44‑A—Object of this Division Table of sections Operative provisions 44‑5 Object of this Division Operative provisions 44‑5 Object of this Division The object of this Division is to remove certain tax concessions for *build to rent developments when they *cease to be *active build to rent developments. Subdivision 44‑B—Build to rent development misuse tax Guide to Subdivision 44‑B 44‑10 What this Subdivision is about You are liable to pay a tax if a build to rent development you own ceases to be an active build to rent development. The tax is on an amount (called a build to rent misuse amount) related to past capital works deductions and withholding amounts (if any) for the active build to rent development. Table of sections Liability for tax 44‑15 Liability for tax Build to rent misuse amounts 44‑20 Build to rent misuse amounts 44‑25 Your build to rent capital works deduction amount 44‑30 Your build to rent withholding amount Liability for tax 44‑15 Liability for tax You are liable to pay *build to rent development misuse tax for an income year if you have a *build to rent misuse amount for the income year. Note: The amount of tax is set out in the Capital Works (Build to Rent Misuse Tax) Act 2024. Build to rent misuse amounts 44‑20 Build to rent misuse amounts (1) You have a build to rent misuse amount for an income year, equal to the amount worked under subsection (2), if the amount worked out under that subsection is greater than nil. (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. 44‑25 Your build to rent capital works deduction amount Your build to rent capital works deduction amount, for a *build to rent development that *ceases to be an *active build to rent development, is the amount worked out as follows: 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. 44‑30 Your build to rent withholding amount Your build to rent withholding amount, for a *build to rent development that *ceases to be an *active build to rent development, is the amount worked out as follows: 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. Subdivision 44‑C—When tax is payable Guide to Subdivision 44‑C 44‑35 What this Subdivision is about This Subdivision has rules about payment of build to rent development misuse tax. Table of sections 44‑40 When tax is payable—original assessments 44‑45 When tax is payable—amended assessments 44‑50 General interest charge 44‑40 When tax is payable—original assessments Your *assessed build to rent development misuse tax is due and payable at the end of 21 days after the Commissioner gives you notice of the assessment of the amount of the *build to rent development misuse tax. Note: For assessments of build to rent development misuse tax, see Division 155 in Schedule 1 to the Taxation Administration Act 1953. 44‑45 When tax is payable—amended assessments If the Commissioner amends your assessment, any extra *assessed build to rent development misuse tax resulting from the amendment is due and payable 21 days after the day the Commissioner gives you notice of the amended assessment. 44‑50 General interest charge If an amount of *assessed build to rent development misuse tax that you are liable to pay remains unpaid after the time by which it is due to be paid, you are liable to pay the *general interest charge on the unpaid amount for each day in the period that: (a) begins on the day on which the amount was due to be paid; and (b) ends on the last day on which, at the end of the day, any of the following remains unpaid: (i) the assessed build to rent development misuse tax; (ii) general interest charge on any of the assessed build to rent development misuse tax. Note: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953. 12 Subsection 995‑1(1) Insert: 4% build to rent manner has the meaning given by subsection 43‑145(2). active build to rent development has the meaning given by subsection 43‑151(2). active build to rent development area has the meaning given by subsection 43‑151(1). active build to rent part has the meaning given by section 44‑25. affordable dwelling has the meaning given by subsection 43‑153(2). assessed build to rent development misuse tax means *build to rent development misuse tax, as assessed under Schedule 1 to the Taxation Administration Act 1953. build to rent capital works deduction amount has the meaning given by section 44‑25. build to rent compliance period has the meaning given by subsection 43‑152(5). build to rent development has the meaning given by subsections 43‑152(1), (2) and (3). build to rent development misuse tax means tax imposed by the Capital Works (Build to Rent Misuse Tax) Act 2024. build to rent misuse amount has the meaning given by section 44‑20. build to rent withholding amount has the meaning given by section 44‑30. cease to be an *active build to rent development has the meaning given by subsection 43‑152(4). commence to be an *active build to rent development has the meaning given by subsections 43‑152(1) and (2). common area, for *dwellings of an *active build to rent development, has the meaning given by subsection 43‑151(3). expand, in relation to an *active build to rent development, has the meaning given by subsection 43‑152(3). Taxation Administration Act 1953 13 Subsection 8AAB(4) (after table item 12) Insert: 12A 44‑50 Income Tax Assessment Act 1997 payment of assessed bu