Page 1496 - Week 04 - Thursday, 29 March 2012

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compliance burdens and streamlining the asset transfer process. As a consequence, it also removes the anomalous duty on goods transferred within these short-term subleases. This change only affects goods transferred with short-term subleases. Transfers of long-term subleases with a term greater than 30 years, and associated goods, will remain liable to duty. I commend the Duties Amendment Bill 2012 (No 2) to the Assembly.

Debate (on motion by Mr Smyth) adjourned to the next sitting.

Rates and Land Tax Legislation Amendment Bill 2012

Mr Barr, pursuant to notice, presented the bill, its explanatory statement and a Human Rights Act compatibility statement.

Title read by Clerk.

MR BARR (Molonglo—Deputy Chief Minister, Treasurer, Minister for Economic Development and Minister for Tourism, Sport and Recreation) (10.11): I move:

That this bill be agreed to in principle.

The Rates and Land Tax Legislation Amendment Bill 2012 amends the Rates Act 2004 and the Land Tax Act 2004. The Rates Act imposes rates on all land in the ACT except for land that is specifically exempted. Different fixed and variable charges are applied to residential, commercial and rural land leases, based on the uses allowed under their purpose clauses. Land that does not have a residential or rural purpose is, by default, charged at the rate applying to commercial land.

In 2001, the concept of a community title scheme was introduced. It provides for a new form of title which allows for the grouping of separate crown leases together, with a shared interest in a common area. A community title scheme applies when two or more separately owned lots share at least one communal space. This communal space is jointly maintained by the owners through a body corporate. Under the Rates Act, each common area lease is valued and rated independently of the separately owned parcels of land. The common area lease generally has a purpose clause other than residential or rural, such as community use, outdoor recreation facilities or road infrastructure. As a result, the common area lease, by default, is charged commercial rates and land tax. This occurs even when the purpose clause does not specifically allow commercial activities on the common area.

The government recognises that this is an anomaly in the rates legislation and that it should be changed. Under the proposed amendment, the level of rates charged on a common area under a community title scheme will reflect the purposes for which it can be used. Where the separate crown leases that have a shared interest in the common area have a residential purpose and the purpose clause of the common area lease is not commercial, residential rates will be charged. Where there are any leases within a community title scheme permitting commercial activities, then rates and land tax at commercial rates will continue to be imposed on the common area.

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