Page 1995 - Week 05 - Thursday, 3 May 2012
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attracts a duty on its value as determined by the authority. This value is the amount that would have been paid for the crown lease had the person opted to purchase the crown lease outright, that is, with no land rent condition attached to the block.
When the land rent lease is transferred from one lessee to another, its value for duty purposes is the greater of the consideration paid and its unencumbered value. This is exactly the same as for a normal crown lease. It has always been the intention that for duty purposes the unencumbered value of the land rent lease would be no different to that of a normal crown lease.
The ACT Revenue Office has been assessing the dutiable value for a transfer of a land rent lease based on the unencumbered value in the same manner as for a normal crown lease. A small number of valuers have suggested that, in their view, the land rent lease has only nominal value. However, the advice received from the Australian Valuation Office and the economic analysis indicate that the dutiable value of the land rent lease is not reduced by virtue of the lessee taking the land rent option. It would, therefore, be incorrect and inequitable to treat the transfer of a land rent lease as having a lower value than the standard crown lease for duty purposes.
This is particularly so when the land rent lease can be converted to a standard residential lease at any time after a transfer. It should be noted that duty is not charged on the conversion of a land rent lease to a standard crown lease. So these amendments clarify that the dutiable value of a land rent lease will have the same unencumbered value as a normal crown lease.
Let me be very clear, because the Leader of the Opposition would appear not to understand, this bill does not increase taxation, nor does it represent a change in policy. Its sole aim is to make the legislation explicit as to how land rent leases are to be valued when transferred. It closes a potential loophole and will ensure that leases are treated in the same manner as other crown leases and attract the appropriate duty.
So I commend both bills to the Assembly. But before I close, I think it is important, given the opening comments of the Leader of the Opposition and the press release that has been put out in relation to my response to a question, either from you, Madam Assistant Speaker, or from Ms Bresnan, in relation to the government’s affordable housing strategy—and the question essentially was “would the strategy be broader than just homeownership?” and my answer to that was, yes, indeed it would—to note that there are many people, in many different circumstances, whether in the latter stages of their life or in the earlier stages of their life, for whom homeownership may not be an objective that they seek at that time. But they would have an entitlement to be able to access affordable housing.
In that instance, their preference may well be through rental because of their personal circumstances. It may be that they do not want to commit to a 25 or 30-year mortgage, for example. It may well be that they do not want to commit to living in a particular city for a period. So their preference would be to rent. I think it is entirely reasonable that a housing affordability strategy would be broader than just simply pursuing homeownership.
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