Legislative Assembly for the ACT: 2017 Week 12 Hansard (Thursday, 26 October 2017) . . Page.. 4438 ..
results from these lease variations, as amounts payable under the other LVC schedules do.
For example, in Kingston in 2014 a developer consolidated two blocks and built 30 units on those two blocks, resulting in an increase in land values of $1.6 million. The LVC payable was just $165,000, or just 10 per cent of the actual value uplift. Similarly, in Dickson in 2013 a developer consolidated two blocks, this time building 19 units on those two blocks, generating an increase in land values of $1.5 million. Under the old arrangements the LVC payable was just $110,000, or 7 per cent of the actual value uplift.
So in updating the schedule 1 codified charge the government’s intention has been to better align the LVC payable for these types of developments with that for projects assessed under the other LVC schedules. To the greatest extent possible, we want there to be consistency and clarity in how LVC charges are assessed and determined. Tax policies are one of many factors that impact housing affordability. Along with zoning and planning rules, construction costs and market demand, tax settings locally and, perhaps more importantly, tax settings nationally play a very significant part in determining housing affordability and, clearly, the development mix across Canberra.
Let me be clear this morning that the government does not agree with the view put by the property industry that the LVC prevents development. The number of new developments going on all across our city provides a pretty powerful counterargument to this view. But we do acknowledge that, in a market as complex and significant as the housing market, it is important to continue to review policy settings to ensure that they are properly calibrated and working in the same direction as the government’s and community’s broader objectives.
That is why we had previously committed to review the schedule 1 LVC changes within 18 months of their implementation in this year’s budget. It is also why the ACT treasury and other government directorates are working together to better understand how all of the policies on tax, planning, development and more intersect in the context of housing affordability. So we are indeed open-minded about possible reforms which could simplify or streamline how the lease variation charge works. There is no doubt that those who are planning property developments want increased certainty. That is fair enough. It is also reasonable that there is improved consistency across projects. The examples that I have highlighted this morning and that Mr Rattenbury gave in his contribution go to just that point.
I need to be very clear, as Mr Rattenbury has been, that we are absolutely committed to the principle of the lease variation charge and that the review that we undertake will only consider improvements to the LVC, not its abolition. Nor will we consider opening any new loopholes that would let developers seek to avoid the lease variation charge. The government is happy to support Mr Rattenbury’s motion this morning.
MS LAWDER (Brindabella) (11.26): I rise today to speak to the motion on the lease variation review. In the 2017-18 budget the lease variation charge on unit titling of residential dwellings was increased from a tiered scale of $7,500 and $5,000 per dwelling to a flat charge of $30,000 per dwelling on the grounds that this will improve