The Victorian Government announced amendments to the "Plan for Melbourne's Growth Areas" policy relating to the infrastructure contribution to be paid by certain land owners in Melbourne's growth areas - Casey, Melton-Caroline Springs, Hume-Mitchell-Whittlesea and Wyndham.
The Growth Areas Infrastructure Contribution (GAIC) will take effect in 2009 following the determination of the new Urban Growth Boundary (UGB) and will apply to relevant land transactions.
Liability for the GAIC will differ depending on when the land was/is brought within the UGB. It will be levied against all land
• brought within the UGB in 2005 and
• all land (identified in “Investigation Areas”) which is subsequently brought into the UGB in 2009 and zoned for urban development.
The GAIC will not apply where:
• The land was brought within the UGB before November 2005
• The individual property is less than 0.41 hectares in area or
• Planning permits for urban development of the property have been granted prior to:
2 December 2008 in the Investigation Areas announced 2 December 2008; or
19 May 2009 in the Investigation Areas announced 19 May 2009.
The GAIC will be levied on either the first sale of the land or its subdivision or the grant of a building permit for major building works, whichever occurs first.
There are two flat rate per hectare charges:
• $95,000 per hectare for any land brought into the UGB in or after 2009; and
• $80,000 per hectare where the land was brought within the Urban Growth Boundary in 2005.
If land is sold or subdivided during the period from the announcement of the Investigation Areas (being 2 December 2008 and 19 May 2009 respectively) and the date the GAIC legislation comes into effect (the “transition period”), it will be the land owner’s responsibility to pay the GAIC. The contribution will be paid at the date the legislation comes into effect, anticipated to be in the latter part of 2009.
Pre-existing sale arrangements
Buyers and sellers of land are not required to pay the contribution where they have had a pre-existing totally binding sale arrangement at:
• 2 December 2008 for land brought within the UGB in 2005 or land in the originally announced Investigation Areas; or
• 19 May 2009 for land in the additional Investigation Area.
However, the GAIC will apply to the next relevant property transaction on this land. (Refer to http://www.gaa.vic.gov.au)
The Victorian Government has stated there are further issues to be considered before the GAIC is implemented. Timing is a key issue - in particular when the tax is payable.
David Ramsay
telephone: 03 9629 5551
email: dramsay@ghb.com.au
This overview is based on recent State government policy announcements. These matters may be revised or changed later this year when the relevant legislation comes into effect.