The ACT Opposition promised yesterday to renew all commercial and residential leases free of charge. Opposition Leader Kate Carnell said that, if elected next month, the Liberals would overturn the ACT Government’s decision to charge 10 per cent of unimproved value to renew commercial leases.
Last week the Minister for Environment, Land and Planning, Bill Wood, announced the renewal policy for 99-year and 50-year commercial leases. He said they could be renewed any time in their last 30 years for a payment of 10 per cent of value, provided the land was not needed for public purposes.
Residential 99-year leases can be renewed upon payment of an administrative fee. Mr Wood said that as commercial leases were for profit it was appropriate to charge a renewal fee and it was necessary to preserve Canberra’s leasehold system.
Mrs Carnell said, “”The fee in effect is a tax on business. The average price of commercial sites in Canberra is among the highest in Australia. Another 10 per cent in costs would discourage private sector investment in the ACT.”
A fee might be appropriate if sites were being sold at a lower market price because they were leasehold rather than freehold, but that was not the case.
The fee would be a disincentive to interstate business to relocate to Canberra and would affect employment.
Mrs Carnell said also that the Liberals would reduce betterment taxes to a maximum of 50 per cent.zzz
At present betterment is charged when leaseholders want to change the purpose for which they use the land. It is charged at 100 per cent of the change in value from the old purpose to the new purpose. It was raised to 100 per cent from 50 per cent about a year ago.
Mrs Carnell said that since the change development had dried up.
“”Under the previous betterment regime, the ACT Government picked up revenue of up to $4 million,” she said. “”Raising the tax to 100 per cent has meant revenue has been reduced to zero.”