Relaxing the LVC the key to urban renewal
The ACT’s property industry has welcomed the Canberra Liberals’ commitment to relax the Lease Variation Charge (LVC) for developments in the city’s CBD and town centres.
Leader of the Opposition, Jeremy Hanson, made the announcement today, promising to remove the LVC in Civic, Tuggeranong, Woden, Belconnen and Gungahlin town centres for four years.
“The Property Council always supports good policy – and the Liberal Party’s commitment to relax the LVC in the CBD and town centres is good policy,” says the Property Council’s ACT Executive Director, Catherine Carter.
“We have been advocating for the removal of LVC from Civic and the town centres for a number of years, and encourage the ACT Government to consider adopting a similar policy to help drive its ambitious urban renewal agenda.
“Relaxing the LVC will accelerate adaptive reuse of older buildings — something which KREAB Research, released just last week, has found has strong support from Canberrans.
“In its current form, the LVC distorts investment decisions and impedes the upgrade of empty, redundant C and D Grade commercial offices – contributing to what is now the second highest office vacancy rate in the country.
“Unless the ACT Government adopts a more realistic taxation policy, these older buildings will continue to deteriorate.
“The LVC has not raised the anticipated revenue – with the June 2015 financial report revealing a $2.8 million shortfall on budget.
“It’s also a deterrent to more sustainable urban development, as it discourages urban renewal.
“In short, the LVC is an anti-competitive tax which handicaps private sector innovation and investment, especially where we need it most.
“We accept that the ACT Government must raise taxes to fund services. However, not only does this tax not raise anywhere near the level of revenue forecast, but it has had the perverse result of losing revenue for the ACT Government from forgone stamp duty, general rates and land tax which would have resulted from increased development activity in the city.
“We urge the ACT Government to replace the flawed policy with a scheme that is simple, affordable and helps the development industry get on with the business of reviving our city.
“Canberrans care about our city, they see the problems and they want them addressed. The simplest way to do this is to adopt a taxation policy that supports building upgrades,” ÂMs Carter concludes.
Media contact: Catherine Carter | M 0412 330 079 |P 02 6248 6902