On 26 May 2010 the Victorian State Government passed the Growth
Areas Infrastructure Contribution (GAIC) Bill.
We refer to our
previous update sent on 22 October 2009 for substantive details
of the Bill.
The Bill was amended to reflect the Government's Memorandum
of Understanding with the Property Council of Australia and the
Urban Development Institute of Australia after being put before a
Dispute Resolution Committee. The key amendments to the previously
considered Bill include:
Developers will pay 30 per cent of the GAIC liability when they
purchase land, with the remaining 70 per cent to be deferred and
paid in stages as the land is subdivided.
The outstanding balance will be indexed at the CPI index until
a Precinct Structure Plan is gazetted for that area at which point
any amount deferred will accrue interest at the Treasury
Corporation of Victoria 10 year bond rate.
GAIC is not payable on lots of 0.41 hectares or less.
GAIC is not payable on the sale of lots of 10 hectares or less
(up from 2.03 hectares) where there is a habitable dwelling, but is
payable if the land is subdivided or developed.
GAIC is not payable on the sale of lots of 5 hectares or less
(up from 2.03 hectares) where there is no dwelling on the land, but
is payable if the land is subdivided or developed.
50 per cent of GAIC revenue will be used for delivering public
transport infrastructure in the growth areas with the remaining 50%
to go to other regional community infrastructure such as health
services, libraries, and sporting grounds.
The Treasurer's approval is no longer required for deferral
of a contribution that exceeds $2 million.
In certain situations, where a party buys land that is subject
to the GAIC, defers 70 per cent of the contribution and then sells
the land to another party during the deferral period, the liability
plus any interest payable will pass to the purchaser.
The government expects to receive $1.2 billion from the GAIC and
has committed to set aside a further $1.2 billion for community
infrastructure such as child care facilities, sporting grounds and
The next step for the Government is to reintroduce the amendment
to expand Melbourne's urban growth boundary, facilitating an
additional 24,000 hectares of land for development. The amendment
will also put in place public acquisition overlays to establish the
proposed 15,000 hectare grassland reserve, the Regional Rail Link
and the Outer Metropolitan Ring / E6 Transport Corridor.
This is a complex piece of legislation and there are a number of
exemptions and differing treatments in the application of the
legislation. Each situation needs to be specifically considered to
determine the actual GAIC liability. We strongly recommend you
obtain advice prior to the sale, subdivision or development of any
land within or proposed to be brought within the growth areas.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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