Last year the Victorian Government announced that owners and
developers of land in growth areas will become subject to the
Growth Areas Infrastructure Contribution (GAIC).
Essentially, the GAIC is a one-off contribution triggered by the
sale, subdivision or development of land within the UGB. This
contribution will help to pay for infrastructure and essential
services in Melbourne growth areas.
The Victorian Government previously introduced legislation for
the implementation of the GAIC, however in February 2010 it was
defeated in the Upper House. Following review at a Dispute
Resolution Committee and negotiations between the Government and
Opposition, the amended Bill was reintroduced to the Upper House.
The Upper House debated the Bill and passed it on 25 May 2010.
The key changes to the GAIC include:
compulsory payment of 30% of the GAIC liability when the land
is purchased, with the remaining 70% able to be deferred by
election and paid in stages as the land is being subdivided
the outstanding balance will be indexed at CPI up to the point
that a Precinct Structure Plan is gazettedafter which the balance
will attract interest at the Treasury Corporation of Victoria 10
year bond rate
purchasers of land are liable to pay the GAIC for land
transfers whereas the landowners are liable to pay the GAIC if they
subdivide or develop the land
unless it is subdivided or developed, the following land within
the UGB is exempt:
properties between 0.41 hectares and 5 hectares; or
lots of 10 hectares or less with a habitable dwelling.
the Victorian Government plans to allocate the GAIC revenue as
50% on delivering public transport infrastructure in the growth
areas through a Growth Areas Public Transport Fund
the remaining 50% to be spent on regional community
infrastructure such as health services, libraries and sporting
The contribution applies to certain land brought within the UGB
during 2005-06 and the proposed 2010 expansions of the UGB. Certain
land transactions that occurred during the transitional period (on
or after the announcement date of 2 December 2008 but before the
commencement day of the new amendments) may also be subject to the
The next focus for the Government is to introduce an amendment
to the Bill to deliver on its promised expansion of the UGB to
provide more land for development.
We recommend that you obtain advice prior to the sale, purchase
or development of any land within the UGB.
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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