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ACT Government LVC Review

 

The ACT Government has announced the outcomes of their LVC Review as part of the 2019-20 budget.  The Review received twelve submissions from a range of stakeholders and found that:

  • Overall, the LVC is achieving its objectives, without impacting on housing affordability and available housing choices;

  • The LVC was not demonstrated to impact on the financial viability of projects, as the review confirmed it isolates the value attributable to government decisions on the use of land, and is a relatively small component of overall project costs; and

  •  Many stakeholders, including project proponents, find aspects of the LVC framework confusing and difficult to understand. This contributes to development time frames. Improvements could be made to make the LVC framework simpler, more equitable and more transparent.

The 2019-20 ACT Budget included information on the changes the Government will make to the LVC framework. The Government will:

  • increase access to the Lease Variation Charge deferred payment scheme by lowering the minimum value threshold from $100,000 to $50,000 from 1 July 2019;

  • simplify and consolidate schedule 2 codified residential charges to make this schedule easier to understand, use and update;

  • introduce a 25 per cent Lease Variation Charge remission for registered community housing providers, commencing on 1 October 2019, to encourage the development of more affordable rental housing; and improve the presentation of information on ACT Government websites containing information about the LVC, including by developing an online LVC calculator.

The Government will also engage further with industry to explore options to:

  • extend application of codified charges to mixed-use developments that are primarily residential in nature;

  • extend application of codified charges that apply to specific types of commercial developments; and

  • address inequity and inconsistency between schedule 1 and schedule 2 residential codified charges. 

Consultation on and design of these proposed options will be undertaken on the basis that changes are revenue neutral.

Some of these options were previously discussed in the detailed consultation report released in February 2019. This report summarised the feedback received from stakeholders and outlined the issues that were being considered by the Government. It is available on: https://yoursay.act.gov.au/lease-variation-charge

ACT Government officials will be undertaking further targeted consultation on the proposed changes, commencing in July. We will continue being part of this conversation and representing our members as part of this review process.