Land Rent Information on or after 1 October 2013

Eligibility

For land rent leases where the Crown lease was first granted under a contract entered into on or after 1 October 2013, and for any subsequent transfers of such a block, applicants must meet the discounted land rent eligibility criteria:

  • Income: to be eligible for land rent, the total gross income of the lessee/s 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, shareholder income, salary packaging benefits and short term higher duty payments. See DI2015-223 (Total income of lessees – post-1 October 2013 leases) for further information.
  • The income threshold is increased by $3,330 for each dependent child, as shown in the table below:

Number of dependent Children

Total gross income threshold

0

$160,000

1

$163,330 

2

$166,660

3

$169,990

4

$173,320

5 or more

$176,650

  • Property Ownership: lessees who enter the Land Rent Scheme cannot own any other real property at any time while leasing a land rent block.  Ownership includes a legal and a beneficial interest.
  • Residency: at least one of the lessees who enter the Land Rent Scheme must reside in the property built on the block, once a Certificate of Occupancy has been issued.
  • Land Rent Payable: Land rent lessees who obtain (by grant or transfer) a land rent block on which the Crown lease was first granted under a contract entered into on or after 1 October 2013 must meet the above criteria and therefore be eligible for the discount rate of land rent.Once a lessee has settled on a land rent block, annual land rent payments to the ACT Revenue Office are required, and are based on the unimproved value of the block.  The land rent payable is 2 per cent of the unimproved value of the leased land. For further details of how the unimproved land value is determined see Land valuations.For land rent leases first granted under a contract entered into on or after 1 October 2013, lessees are not able to access the standard 4 per cent rate of land rent.  Should a lessee become ineligible for the discount rate, they may be required to transition out of the Land Rent Scheme (see information below).
  • Ongoing Eligibility: Once a lessee has obtained a land rent block (for which the Crown lease was first granted under a contract entered into on or after 1 October 2013), they must continue to meet the eligibility criteria for the discounted land rent to remain in the Scheme.
    If a lessee's circumstances change and the income threshold amount is exceeded for two consecutive years; the lessee becomes the owner of other real property, and/or stops living on the parcel of land under the land rent lease, the lessee will be required to transition out of the Scheme.Lessees who become ineligible for the Land Rent Scheme will receive notification from the Commissioner for ACT Revenue and will be required to transition out of the Land Rent Scheme over the following two year period. This can occur by either purchasing the land outright from the Government, or transferring the lease to another eligible applicant who meets the eligibility criteria for the discounted land rent.Should a land rent lessee return to eligibility during this two year transition period (for example, a reduction in income or the sale of other owned property), they should contact the ACT Revenue Office immediately.
  • Restriction on Transfer: Should a lessee wish to transfer a land rent block where the Crown lease was first granted under a contract entered into on or after 1 October 2013, the transfer must be to another eligible transferee (being someone who meets the three eligibility criteria shown above).  The prospective transferee will need to contact the ACT Revenue Office to determine if their income is below the relevant threshold amount.If a lessee who has settled on a land rent block converts the land rent lease to a nominal rent lease (either at the time of on-sale or earlier), the restriction on transfer will not apply.
  • Application Process for Discount Land Rent 

    Applicants and any domestic partners must use the Discount Land Rent Application/Review form [RTF, 1Kb], [PDF, 263Kb] and provide evidence of income. All applicants will be advised on the outcome of their application in writing.

    Annual Review

    Lessees who obtain a land rent block where the Crown lease was first granted under a contract entered into on or after 1 October 2013 must continue to meet the eligibility criteria for the discount rate of land rent to remain in the Scheme. Lessees are required to confirm by 30 September each year that their annual income has remained under the applicable income threshold using the Discount Land Rent Application/Review form [RTF, 1Kb], [PDF, 263Kb].  An annual review of lessees' income will be conducted to determine continuing eligibility for the land rent Scheme.

    Lessees will not be eligible to pay land rent if any of the following occurs:

  1. total income of the lessee/s and their domestic partner (household income) exceeds the income threshold amount for 2 consecutive years;
  2. of the lessees becomes the owner of other real property;
  3. a Certificate of Occupancy is issued for the lease - the lessees fail to take up residency or all of the lessees move out of the property.