A liability for Lease Variation Charge (LVC) arises when a lessee seeks to vary a lease and the lease variation is approved by a development approval under the Planning and Development Act 2007 (repealed) and now under the Planning Act 2023. A LVC is levied on the increased land value arising from a change in development rights contained in a lease.
Ordinarily, the LVC must be paid before a lease variation is executed, however lessees have the option to defer the payment of LVC to after the lease has been varied, where the amount of LVC exceeds a certain threshold.
- From 1 July 2019, this threshold is reduced to $50,000. Previously lessees could only opt in to defer LVC if the LVC payable was at least $100,000.
From 29 October 2019, and pursuant to the Pathway to 4000 Gaming Machine Authorisations by 2020 (August 2018), gaming machine clubs that hold a class C licence under the Gaming Machine Act 2004 and that can demonstrate a public benefit through the development and/or use of the land subject to the LVC, may opt to defer the payment of LVC at market interest rate only.
Lessees can seek to take up these options by applying to the Commissioner for ACT Revenue. They can do this by completing an application form below.
The deferral commences when the lessee or lessees enter into a deferral arrangement with the Commissioner for ACT Revenue. The ACT Revenue Office will arrange for the signing of the deferral arrangement when the details of the deferral application form have been verified. Once the arrangement is entered, the lease can then be varied.
The deferral arrangement contains terms and conditions for the deferred payment of LVC, such as:
Interest will accrue on the amount of the LVC deferred at the prescribed market rate plus 1.8 percentage points per annum, from the date of the execution of the lease variation until payment is made in full. Interest will be calculated on a compounding basis.
Interest will accrue at the market rate only for certain gaming machine clubs that can demonstrate a public benefit through the development and/or use of the land subject to the deferred LVC.
The earlier of:
- The date a certificate of occupancy and use is issued for part, or all of, the building work for the development to which the LVC relates, or
- The end of a four-year period commencing from the day the chargeable variation was executed, or
- The settlement date should the property or part thereof be sold.
Note, LVC must be paid before a units plan can be registered.
Additional interest and penalty tax may accrue in addition to the commencement of proceedings to recover the unpaid LVC.
This will be reflected in the terms and conditions of deferral by way of a variation.
How to apply for a deferral of LVC?
Contact Details
Phone: (02) 6207 0028
Online: Contact Us
Post: ACT Revenue Office, GPO Box 293, CANBERRA ACT 2601