The land rent scheme has been extended to former owners of Mr Fluffy homes who chose to exercise their First Right of Refusal and may be eligible for land rent. This allows people who would otherwise be unable to meet the costs of purchasing their former block – as well as the costs of building – to return to their neighborhood.
Key Details
- Prior to legislative amendments that were made specifically for Mr Fluffy blocks, the Land Rent Scheme was only available for greenfield estates in new suburbs.
- The eligibility criteria for former affected owners are the same as other land rent lessees:
- A household income threshold of $160,000 pa, increasing by $3,330 for each dependent child up to five children.
- Lessees cannot own any other real property (in any State or Territory in Australia or overseas) while leasing a land rent block. Ownership includes a legal and a beneficial interest.
- At least one of the lessees must reside in the property built on the block, once a Certificate of Occupancy has been issued.
- The rent amount to be paid to the Territory is calculated at 2% of the unimproved value of the land.
In addition to the eligibility criteria, to enter into a Land Rent contract, buyers must provide the following at exchange:
- A completed Discounted Land Rent Form 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, buyers will be required to provide the following:
- A Statutory Declaration witnessed by their solicitor declaring they understand the contract and their rights and obligations;
- A certificate from a qualified financial adviser or practicing accountant confirming they have received financial advice
- Proof of attendance at the Canberra Institute of Technology (CIT) Land Rent Information Session.
Mr Fluffy homeowners who choose to sell the block and/or exit the Land Rent Scheme
- The re-mediated blocks can only be converted to a standard lease at market value.
- A land rent lease granted for a re-mediated block cannot be transferred to another person. The lease must be converted to a standard lease before the block can be sold. This is because this is a generous extension of the land rent scheme and measures need to be put in place to minimise people from unfairly profiting from the scheme, as well as in fairness for other owners and the broader community.