Page 4435 - Week 12 - Thursday, 26 October 2017
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(v) seek to align charges with the Government’s housing affordability, housing supply and planning policies;
(vi) include modelling of the potential impacts of changes on the financial viability of development; and
(vii) be conducted on a revenue-neutral basis; and
(b) introduce any resulting changes to charges by the 2019-20 budget cycle, with appropriate communication and transitional arrangements as necessary.
This motion calls for a review of the lease variation charges and remissions that apply to residential and mixed use development. I will start with a bit of background on this issue, as it is some months since it has been discussed in the Assembly. Members will recall that the 2017-18 budget included an increase in the lease variation charge on unit titling and residential dwellings on most but not all residential crown leases. This charge is typically paid by new multi-unit residential developments such as duplexes, townhouses and apartments. It is incurred when the lease has been changed to specify a maximum number of dwellings that are permitted on the lease.
Previously the charge was levied on a tiered scale of $7,500 and $5,000 per dwelling. Now it is levied at a flat charge of $30,000 per dwelling. Shortly after the budget announcement, the Property Council and other industry groups contacted the government and my colleague Ms Le Couteur, identifying that the change could have unintended consequences. These included the financial impact on individual developers who are close to finalising developments; the potential impact on the rate of urban renewal and the potential impact on housing affordability.
The government responded to these concerns by announcing two tranches of transitional arrangements. These transitional arrangements covered developers in two situations. First, developers who had lodged a development application prior to 30 June 2017 would be charged at the old rate. This gave time between the budget and the end of the financial year for developers who were almost ready to lodge a development application to have it assessed at the old charge rate.
Second, the old charge rate would apply to developers who had purchased land between 30 June 2016 and 30 June 2017 and who then lodged a development application up until 1 October—that is, the first of this current month. This was intended to cover developers who had recently bought a development site at a price reflecting the lower charge and would find their development potentially unviable at the new charge.
The government also announced that it would conduct an internal review of the implementation of the changes within 18 months. Industry groups supported the transitional arrangements but also raised concerns about the broader impacts of the change beyond the transition period. These concerns related mainly to the longer term impact on housing affordability and the supply of new multi-unit housing. The
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