Page 3070 - Week 10 - Thursday, 15 August 2013
Land Rent Amendment Bill 2013
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, Minister for Sport and Recreation, Minister for Tourism and Events and Minister for Community Services) (10.04): I move:
That this bill be agreed to in principle.
The Land Rent Amendment Bill 2013 will implement important changes to retarget the land rent scheme. The land rent scheme is an important affordable housing initiative in the ACT, allowing lessees to rent land from the government instead of purchasing the land outright. This assists purchasers in entering the housing market by reducing the upfront financial obligations associated with buying a property.
As part of the government’s affordable housing reform measures as announced in the recent budget, amendments are being made to the Land Rent Act 2008. These amendments will ensure that the land rent scheme is best targeted to those most in need.
These amendments will only apply to land rent leases entered into on or after 1 October 2013 and will restrict entrance to the land rent scheme to only those applicants who are eligible for the discount land rent rate of two per cent. The scheme requires annual payment of land rent and currently has two bases for participation. Lessees who meet the required eligibility criteria for a discount rate of land rent are charged two per cent of the unimproved value of the land. Those lessees who are ineligible for the discount rate pay a standard rate of four per cent.
To be eligible for the discount rate, lessees must reside in the property once construction of a residence of the block is complete and cannot own any other real property. In addition, the income of the lessees must not exceed an annually determined threshold amount.
While the two per cent rate is subject to these criteria, the standard four per cent rate is available without restriction. This has resulted in a large take-up of land rent leases by builders and developers, thereby reducing availability of land rent blocks to low and middle income earners. To ensure that the scheme is more appropriately retargeted to those potential participants who will most benefit from it, the land rent scheme will only be available to those new entrants who are eligible for a discount land rent rate of two per cent. This will apply to all land rent leases entered into on or after 1 October 2013.
It is important to note that these amendments to the land rent scheme will not affect those lessees who are already participating in the scheme, either at the two per cent or