Page 3526 - Week 11 - Thursday, 19 September 2013
be proposing an amendment in the detail stage that goes to that effect. That amendment has been circulated and I will speak to it in more detail when we come to that point.
For now, I note those issues and I indicate that the Greens will be supporting this bill today.
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) (4.49), in reply: I thank members for their comments. The Land Rent Amendment Bill 2013 will retarget the land rent scheme to ensure that this scheme is only available to applicants who will receive the greatest benefit.
The land rent scheme is a vital affordable housing initiative which provides a valuable service to first home buyers in the territory. It allows lessees to rent land from the government instead of purchasing the land outright. This allows purchasers who may not otherwise be able to enter the property market to do so by significantly reducing the up-front financial obligations.
These amendments implement changes to the scheme announced as part of the 2013-14 territory budget. These changes 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 discounted land rent of two per cent.
Eligibility for the discounted rate is currently determined by several factors. Lessees must reside in the subject property once the subject residence is completed, and cannot own any other real property. In addition, the income of lessees must not exceed an annually determined threshold amount.
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 rent are charged two per cent of the unimproved value of the land. Those lessees who do not qualify for the discount rate pay at a standard rate of four per cent.
As the discounted rate of two per cent requires lessees to meet eligibility criteria, the standard four per cent rate is currently available without restriction. This has resulted in a large take-up of land rent leases by builders and developers. This has reduced the availability of land rent blocks to the intended recipients of the scheme, those being low and middle income earners.
From October 2013 applicants wishing to enter the scheme must be eligible for the discounted rate. In addition to restricting entrance to the scheme, a number of other retargeting measures are being introduced. This will ensure that the land rent scheme continues to be accessed by genuine low and middle income applicants.
Lessees who enter the land rent scheme from 1 October 2013 must remain eligible for the discounted two per cent land rent rate. Lessees who become ineligible for the discounted rate will be obliged to transition out of the scheme, and will be provided with a two-year period in which to do so.