A Lease Variation Charge (LVC) is payable 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. 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 is varied, however legislation has been enacted to provide lessees with the option to defer the payment of LVC amounts of at least $100,000.
This means lessees may elect to defer the payment of LVC to a later date, after the lease has been varied. A lessee can make this election by applying to the Commissioner for Revenue to defer their payment of the LVC. 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 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 market rate plus 1.8 percentage points per annum, from the time the LVC is deferred until payment is made in full. Interest will be calculated on a compounding basis. Planning and Development (Lease Variation Charge Deferred Payment Scheme) Determination 2018 – DI2018-88.
- Before a certificate of occupancy and use is issued for the development, or
- Before the end of a four year period commencing from date the lease is varied, whichever is earlier.
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.
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 into, the lease can then be varied.
How to apply for a deferral of LVC?
Details on application processes
Phone: (02) 6207 0028
Online: Contact Us
Post: ACT Revenue Office, PO Box 293, Civic Square ACT 2608