Page 3071 - Week 10 - Thursday, 15 August 2013
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the four per cent rate. This bill makes it clear that the amendments will only affect those new lessees who are entering the scheme on or after 1 October 2013.
In addition to restricting entrance to the scheme, a number of other retargeting measures are being introduced which will ensure that the land rent scheme continues to be accessed by genuine low and middle income applicants. In the current land rent scheme, income is assessed based on lessee income only. For new entrants the income threshold will be increased and will be assessed on a household income basis. This approach will be more reflective of applicant income and will ensure that the scheme is retargeted to appropriate households.
The income threshold will be increased to $160,000 and will align the land rent scheme with the homebuyer concession scheme. For those lessees who enter the land rent scheme after 1 October this year, it is essential that they remain eligible for the discount two per cent rate of land rent. Lessees who become ineligible for the discount rate will be obliged to transition out of the scheme, and will be provided with a two-year period in which to do so.
Lessees will have the option of converting their land rent lease to a nominal crown lease or of transferring their block to another eligible land rent applicant. Should a lessee return to discount eligibility in this two-year period, they may be able to remain in the scheme.
Those lessees already participating in the land rent scheme prior to October this year will have continued access to both the two and the four per cent rates should their circumstances change. Should a lessee who enters the scheme after 1 October this year wish to transfer their land rent block, they must do so to an eligible applicant, being a lessee who is also eligible for the discount rate of rent. This will ensure that the land rent scheme continues to be appropriately accessed by genuine applicants and low and moderate income households.
However, this bill allows the Commissioner for ACT Revenue to approve a transfer to a non-eligible applicant in appropriate circumstances. This will assist with the proper administration of the retargeted scheme and help with any anomalous situations that may result from a restricted transfer.
This bill also introduces a number of minor amendments to improve the administration of land rent. The definition of owner is clarified to ensure that potential land rent participants do not have either a legal or beneficial interest in other real property in a company name or under a trust. This will assist in limiting the scheme to genuine applicants looking to enter the housing market.
In addition, the definition of “land rent” is amended to ensure the charging of interest for overdue land rent aligns with that of both general rates and land tax. The various amendments implemented by this bill will all work together to make sure that the land rent scheme is available to those low to middle income earners who are genuinely looking to enter the housing market. These measures will ensure that land rent continues to play a vital role in the government’s affordable housing initiatives.
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