Page 1494 - Week 04 - Thursday, 29 March 2012
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video
MR SPEAKER: Thank you, members. Let us hear the minister. Mr Barr, you have the floor.
MR BARR: I am a bit flabbergasted that Mr Hanson called “shame” when we are seeking to help people achieve the dream of homeownership.
Mr Hanson interjecting—
MR SPEAKER: Thank you, Mr Hanson; the point has been made.
MR BARR: This scheme is part of the affordable housing action plan that provides people with the opportunity to build and own a house sooner than would otherwise be possible by renting the block from the ACT government rather than purchasing it. The land rent scheme allows people to access homeownership by reducing up-front costs of financing, the purchase of land and construction of a home on that land. The scheme allows households to purchase the land at any time by applying to the Planning and Land Authority for a variation of the lease to reduce the land rent payable to a nominal rent.
Under section 22(3) of the Duties Act, the granting of a land rent lease by the ACT Planning and Land Authority attracts a duty on its value as determined by the authority. Its value is the amount that would have been paid for the crown lease had the person opted to purchase the crown lease outright. As is the case with a normal crown lease, when a land rent lease is subsequently transferred from one lessee to another, its value for duty purposes is the greater of the consideration paid or its unencumbered value.
At the inception of the scheme, it was intended and expected that the unencumbered value of a land rent lease for duty purposes would be no different to that of a normal crown lease. The ACT Revenue Office has assessed the dutiable value of a transfer of a land rent lease based on the unencumbered value in the same manner as for a normal crown lease. This approach is supported by advice received from the Australian Valuation Office that the dutiable value is not reduced by virtue of the lessees taking a land rent option.
However, confusion about the value of a land rent lease has resulted from some valuers providing valuations indicating that in their view the land rent lease has only a nominal value. It would be inconsistent and inequitable to treat the transfer of a land rent lease as having a lower value than a standard crown lease for duty purposes. This is particularly so when the land rent lease can be converted to a standard residential lease immediately after the transfer. No duty would then be charged on the conversion of a land rent lease to a standard crown lease. These amendments will clarify the dutiable value of a land rent lease for the purposes of assessing duty. Under the Duties Act 1999, the dutiable value of a land rent lease will have the same unencumbered value as a normal crown lease.
For the benefit of Mr Hanson, who appears incapable of understanding this, this bill does not increase taxation, nor does it represent a change in policy. Its sole aim is to
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . . Video