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Land Rent Scheme

What is the ACT Land Rent Scheme?

The Land Rent Scheme is an ACT Government initiative to increase access to affordable home ownership.  The main purpose of the scheme is to reduce the entry costs and mortgage payments for homeowners. The scheme is also expected to be used as a means for people to advance their entry into homeownership, by saving to buy the land outright in the future while paying land rent.

Under the scheme, lessees rent the land from the Government. They are required to pay the Government land rent, calculated on the unimproved value of the block of land. Lessees are required to construct a house on the land within two years of the lease being granted.

The scheme allows a person to lease the land rent block of land on an ongoing basis or to convert the land rent lease to a traditional Crown Lease at a later date, effectively purchasing the land from the Government at that time.  Land Rent is not a 'rent to buy' scheme.

What are the different types of Land Rent?

Initially the Land Rent Scheme was open to all purchasers with the rate of land rent payable determined by household income and other eligibility criteria. Changes were made to the scheme in October 2013 meaning that entry to the scheme in new LDA estates will only be available to eligible purchasers.

The table below illustrates the differences between the ‘Old Scheme’ and the ‘New Scheme’.

 

OLD SCHEME

NEW SCHEME

Applies to land released

Before 1 October 2013.

On or after 1 October 2013.

Included suburbs

Bonner, Coombs, Dunlop, Franklin, Harrison, Jacka and Wright (available from original purchaser eg. House and land packages).

Moncrieff.

Who is eligible at the standard (4%) rate?

Anyone can buy a property under the ‘old scheme’ and rent at the 4% rate.

No one – land rent properties subject to the ‘new scheme’ can only be owned by households that qualify for the discount rate.

Who is eligible for the discount (2%) rate

Persons that meet the following eligibility criteria:

- Lessee(s) income does not exceed $95,900[1].

- Lessee(s) must reside in property.

- Lessee(s) cannot own other real estate.

Persons that meet the following eligibility criteria:

- Household income does not exceed $160,0001.

- Lessee(s) must reside in property.

- Lessee(s) cannot own other real estate.

Ability to move between standard rate and discount rate

Lessees can move between the standard rate and discount rate (and vice versa) as circumstances change.

If a household ceases to be eligible for the discount rate, they are required to convert to a standard Crown Lease or transfer the Land Rent Lease.

Special conditions regarding transfer of lease

None.

Land Rent Lease can only be transferred to other purchasers that are eligible for the ‘new scheme’.

[1] Plus $3,330 per dependent child, up to a maximum of five children. Thresholds are updated annually.

Land Rent Eligibility – from 1 October 2013

As of 1 October 2013, entrance to the Land Rent Scheme is restricted to low to moderate income households eligible for the discount land rent rate of 2 per cent.  The standard 4 per cent rate of land rent will not be available to new entrants to the Scheme (that is, entrants who obtain a land rent block where the Land Rent Crown lease is first granted under a contract entered into on or after 1 October 2013.

To be eligible for Land Rent, your total gross income must be assessed by the ACT Revenue Office and must not exceed the income threshold of $160,000.  Income is calculated on a household basis (that is, the income of a lessee and their domestic partner), and includes income from all sources, such as a second job, salary packaging benefits and short term higher duty payments. The income threshold is increased by $3,330 for each dependent child, up to a maximum of five children.

In addition to the eligibility criteria, in order to enter into a Land Rent contract buyers will be required to provide the following at Exchange:

  • a completed Land Rent application which includes a Statutory Declaration confirming they believe they meet the eligibility criteria;
  • a $2,000 security payment that will be credited towards their land rent payments at settlement.

Within 90 days of Exchange, Land Rent contract buyers will be required to provide the following to the LDA’s solicitor:

  • a Statutory Declaration witnessed by their solicitor declaring they understand the contract and their rights and obligations;
  • a certificate from a qualified financial advisor or practising accountant confirming they have received financial advice; and
  • provide proof of attendance at the Canberra Institute of Technology (CIT) Land Rent Information Session.

The contract with the LDA will be conditional upon the ACT Revenue office confirming that the buyer meets the eligibility criteria.

Land Rent Information Session

Prior to entering the Land Rent Scheme, you are required to attend an information session at the CIT.  This session will provide you with further detail on the scheme and allow you to ask questions.

To make a booking or for further information on the information sessions send an email to [email protected] or phone 02 6207 3188.

Further Information

For more information about the Land Rent Scheme visit the Economic Development Directorate’s (EDD) website at www.economicdevelopment.act.gov.au/buy-land-and-build/affordable_housing/land_rent

For more information about the Land Rent Scheme view the Frequently Asked Questions.

For further information on land available please view the 'Land for Sale' section of our website or contact us on 1800 777 952.

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