Page 4178 - Week 10 - Tuesday, 21 September 2010
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been noted in the debate, the bill is about concessional leases and how they are identified. Concessional leases are leases granted by the government for less than market value. They are granted in the expectation that the lessee will provide a community or economic benefit to the territory in return for obtaining the lease at a discount.
Many leases granted in the 1940s and 1950s, for example, were granted at a lower value to attract new investment into the territory in the early stages of the city’s development. They were particularly prominent following the Depression and war years. Since 1992 it has been unlawful to transfer any lease granted for less than market value without the required government consent. This rule applied to existing leases as well as to new leases. A concessional lease still cannot be sold without the permission of the government. It is therefore crucial for a prospective buyer to know whether the intended purchase is a concessional lease.
As I have said earlier, Mr Speaker, the concessional status of a lease goes to the heart of its transferability and therefore its market value. In past years, leases were often granted without an explicit statement as to their concessional status. Pleasingly, this is no longer the case. As a result of the old rule, buyers of land needed to examine the historical title and historical circumstances to determine the status of the lease. There is no doubt that this can be time consuming and difficult and that these difficulties run counter to the aim of the register of land titles which is for the status of leases to be readily apparent. These difficulties also run counter to the aim of having a property title system which permits the buyers and sellers to transfer property with ease and confidence.
The government started to review concessional lease policy in 2004, culminating in an analysis done by consultants KLA Australia. The report included a number of recommendations on the granting and administration of concessional leases. In response, the government agreed to a number of measures, including a new process for the identification of concessional leases. The new process permits a lessee to apply to ACTPLA for a declaration as to the status of their lease. That process is now mandated in the Planning and Development Act.
The Law Society and the Property Council have indicated that difficulties remain. In particular, there are difficulties for those who lack the knowledge, lack the time or lack the resources to apply to the ACT Planning and Land Authority for a declaration as to the concessional lease status, or who do not know when to apply.
As I indicated earlier, the government agrees with the Law Society on the need to allow easier identification of the concessional status of leases. This is vital not just for individual sellers and buyers but also for the integrity of the register of land titles and the property system as a whole. This bill meets this need by making it easier to identify whether a particular lease is concessional or at risk of being so. With the bill in place, buyers, sellers, conveyancing lawyers and others will be able to look at a lease in the register of land titles and tell immediately whether the lease is concessional or at risk of being concessional.
In order to achieve this, the bill groups all leases into the following three categories: concessional leases, market value leases and leases that are possibly concessional. The
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