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LAND (PLANNING AND ENVIRONMENT) AMENDMENT REGULATION 2006 (NO 1) (NO 12 OF 2006)
2006
LEGISLATIVE ASSEMBLY FOR THE
AUSTRALIAN CAPITAL TERRITORY
LAND (PLANNING AND ENVIRONMENT)
AMENDMENT REGULATION 2006 (No 1)
Subordinate Law No
SL2006-12
EXPLANATORY STATEMENT
Circulated by authority of Simon
Corbell MLA
Minister for Planning
The Land (Planning and Environment) Amendment Regulation 2006 (No 1)
(amendment regulation) repeals the following provisions for remission of
change of use charge for lease variations in local centres.
Section
184A of the Land (Planning and Environment) Act 1991 requires payment of
a change of use charge (CUC) for lease variations. CUC is typically levied
where value is added to the land through a change to the Crown lease (normally
75% of the added value). Section 184C of the Act also provides for remissions
or increases to CUC in circumstances prescribed by regulation.
The
Land (Planning and Environment) Regulation 1992 requires the Planning and
Land Authority to remit in full the change of use charge for variation of a
lease in a local centre in specified circumstances. Full remission is required
when a lessee applies to the Authority for a lease variation (including
consolidation or subdivision) and at the same time obtains a declaration by the
Authority that:
• the relevant local centre is no longer viable or would cease to be viable within three years if the variation does not proceed; and
• the local centre is unlikely to be developed if the Authority grants
no remission of the change of use charge for lease variations in the centre.
This is the effect of sections 17 and 18 (lease variation) and 28 and 29
(consolidation and subdivision) of the Land (Planning and Environment)
Regulation. The amendment regulation repeals these sections.
Background
Many ACT local centres have been
struggling to maintain commercial viability for some time due to a range of
social and economic changes affecting retail patterns and shopper behaviour. In
response to these circumstances and in light of the level of community support
for local centres, governments have sought to introduce policies that would
assist such centres to continue to provide an ongoing focus for their local
communities.
The aim of the policy on CUC for local centres was
ostensibly to assist lessees in local centres to adapt to changed economic
circumstances by making it easier (through remissions) to develop and upgrade
unviable centres and provide new services to local neighbourhoods. At the same
time changes were introduced into the Territory Plan (Variation No 64) to enable
greater flexibility in land use while also seeking to maintain the community
access to local services and facilities (particularly convenience retailing).
The variation to the Territory Plan permitted residential development of local
centre land by more than 50% if it is established that the centre (or relevant
parts) was no longer commercially viable.
The above policies (Territory
Plan changes and remission of CUC provisions) were introduced in 1997 the
economy was less buoyant than in recent years. There is now a concern that
these same policies may in practice have the unintended effect of contributing
to the decline of some local centres rather than supporting them. In
particular, there are concerns that the policies encourage the unnecessary loss
of local services through the conversion of commercial and retail services to
residential use. The policies do this by distorting property and development
markets through the provision of:
• financial incentives for commercial uses in local centres to be allowed to run down in order to fit criteria for approval of redevelopment for medium density residential uses;
• higher returns for residential development in local centres than in other areas (in general, lessees undertaking redevelopment outside local centres must pay 75% of the CUC);
• financial incentives for the developer to “fit in” as many residential dwellings as possible to gain maximum financial advantage from the remission; and
• full remission of CUC for variations that create additional
development rights (increased gross floor area) even though the acquisition of
these rights diminishes the financial need for remission.
The potential
for these distortions to contribute to a decline in local centres can no longer
be justified. This is particularly so in the current economic climate when the
demand for new residential development within existing suburbs, especially in
central locations, is already high.
The existing remission provisions
have also proved difficult to apply in practice. The evidence and methods for
deciding whether a local centre has ceased or will cease to be commercially
viable are often contentious and do not always result in clear answers. This is
not helped by the fact that it is often difficult to test the evidence in a
fully open manner due to commercial confidentiality constraints.
The
Planning and Land Council has advised the Planning and Land Authority that it
supports the removal of these remission provisions.
Section 1 - Name of regulations - provides that the name of the
amendment regulation is the Land (Planning and Environment) Amendment
Regulation 2006 (No 1).
Section 2 - Commencement - provides
that the amendment regulation commences on the day after its notification day.
Section 3 – Legislation amended – provides that the
regulation amends the Land (Planning and Environment) Regulation.
Section 4 – Repeal of sections - repeals sections 17 and 18
of the Land Planning and Environment Regulation. These repealed sections
required the Planning and Land Authority to remit in full the change of use
charge for variations of leases in local centres if the Authority made a
declaration that:
• the relevant local centre is no longer viable or would cease to be viable within three years if the variation does not proceed; and
• the local centre is unlikely to be developed if the Authority grants
no remission of the change of use charge for variations of leases of land in the
local centre.
Section 5 – Repeal of sections - repeals
subsection 19(3) of the Land Planning and Environment Regulation. This
amendment is required to remove a reference to repealed section 17 of the
Regulation.
Section 6 – Repeal of sections - repeals
sections 28 and 29 of the Land Planning and Environment Regulation. These
repealed sections required the Planning and Land Authority to remit in full the
change of use charge for the consolidation or subdivision of leases in local
centres if the Authority made a declaration that:
• the relevant local centre is no longer viable or would cease to be viable within three years if the variation does not proceed; and
• the local centre is unlikely to be developed if the Authority grants
no remission of the change of use charge for the consolidation or subdivision of
leases of land in the local centre.
Section 7 – Repeal of
sections - repeals subsection 30(2) of the Land Planning and Environment
Regulation. This amendment is required to remove a reference to repealed
section 28 of the Regulation.