Legislative Assembly for the ACT: 2008 Week 5 Hansard (8 May) . . Page.. 1571..
MR STANHOPE (continuing):
The scheme takes advantage of the ACT's land leasehold system and will make buying a home a possibility for many people who might previously have thought home ownership was out of their reach. By paying rent on a block of land rather than finding the full purchase cost, home buyers can potentially reduce the housing costs by hundreds of dollars a week.
Access to safe, secure and affordable accommodation is one of the most basic of human needs, and the dream of owning a home is one shared by most Canberrans. Changes in the housing market over the past years driven by sharp increases in demand have pushed this dream out of the reach of many Canberrans.
The government is particularly concerned about easing housing stress for low and medium-income households so that all members of our community have access to affordable and appropriate housing. We understand that the first step into the housing market is often the hardest; therefore, we are putting into place a land rent scheme to help to make that step easier to reach.
To help those most vulnerable households the scheme will initially only be open to households eligible for the discount rental rate. This will allow entry to those currently unable to access the housing market. At a later stage the scheme will be open to all households, including builders and investors.
Under the scheme, householders will own their own homes but pay rent on their land. The annual rent will be calculated as a percentage of the unimproved value of that land. To help families on lower incomes, the scheme will have two rental rates—a discount rate and a standard rate.
Under the discount rate, households will pay annual rent calculated as two per cent of the unimproved value of their land. In order to help those most in need, the rate will only be available to households who meet eligibility through an income, ownership and residency test.
Over time, households not eligible to access the discount rate will be able to access the scheme at the standard rental rate. Annual rent will be calculated at four per cent of the unimproved value of land. To help with housing affordability, this rate will also be available to builders and to investors. However, the scheme has been designed to be flexible and to allow households to move between the two rates, depending on changes in their circumstances.
To protect households from large annual rental increases and for housing to remain affordable, growth in rent will be capped at the level of wages growth. This will ensure that the increase in rental payments does not exceed the growth in income and will help to mitigate housing stress attributed to increasing land values.
This scheme has been designed to allow households to purchase the land from the government at any time. Under this scheme, households will be able to save towards the purchase of their block of land while they are participating in the scheme. This will allow them to purchase it from the government when they are financially ready to do so.