Build-to-Rent-Own: What It Is and Why South Australia is Set to Benefit

South Australians could be among the biggest beneficiaries of rental housing, as the state considers a major national expansion of the model.

The South Australian Labor Party has announced that if it is re-elected in next month’s state election, the government will look to significantly expand its rental program, adding new, purpose-built homes to the program.

Under the proposed lease extension, 2000 new homes will be built over the next eight years through an investment of $413.5 million.

The promise follows a series of housing announcements from both the SA Labor and Liberal parties ahead of the March 21 election, including stamp duty rebates for downsizers.

How does hiring work?

Also known as lease-to-buy schemes, lease-to-own involves leasing arrangements that give tenants the opportunity to purchase the property at the end of a fixed rental period, at a pre-agreed price.

The model is designed to make it easier for homebuyers to get on the property ladder by removing the need for a traditional deposit and delaying the bank loan requirement.

In South Australia, if the Labor state government is re-elected in the March 21 election, it will provide $280 million to build 1250 of the 2000 new homes.

This will be boosted by a Commonwealth grant of $133.5 million to deliver an additional 750 homes, under an $800 million housing deal signed with the federal government in January 2025.

Under this scheme, qualified buyers can move into a newly constructed house and pay a rent set at 75% of the market rate before purchasing the property.

This program was first announced as a trial in May 2025 and is being offered to more than 100 households. Photo: Getty

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According to the state government, the purchase price is fixed at the beginning of the rental period. Tenants will have two years to buy the home, with a third year extension available if needed. If the home is not purchased during that time, it will be sold on the private market.

The rent-to-own model is not new to South Australia. The case was presented for the first time in May 2025, and 125 homes were given in this program.

The Labor government has committed to expanding the program 16 times, said South African Prime Minister Peter Malinauskas.

“Furthermore, the money made from the program will be reinvested to build rental houses,” said Mr. Malinauskas.

“By giving tenants a hand with reduced rent, with a fixed price now, we are giving them a realistic picture of owning their homes in the future.”

The director of the Housing Industry Association SA, Stephen Knight, said the trial had already shown that the program could help buyers “get out of the rental zone” and into the property market quickly.

“A further 2000 homes over the next eight years will significantly improve our housing stock and a welcome contribution to helping solve our housing supply problem,” said Mr Knight.

“With up to three years of savings while paying reduced taxes and buying at a rental price it will open the door for many who would have thought home ownership was just a dream.”

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