Population growth and robust property sector driving ACT economic growth
The ACT Budget is a roadmap for a growing Canberra that supports an increasingly diverse economy while continuing to invest in health, education and community infrastructure ensuring that Canberra remains one of the world’s most liveable cities.
ACT Executive Director of the Property Council, Adina Cirson, says there are a number of welcome measures in the Budget which will support the economy and position Canberra as a more attractive destination for business and investment.
The Government has also listened to industry concerns on commercial rates and the Lease Variation Charge.
The ACT has the strongest growth of any state or territory, the lowest unemployment and highest median wages. The ACT’s population is growing by 8,000 people a year and will reach 460,000 by 2023.
The property industry is a driver of Canberra’s economic strength and diversity, employing one in seven Canberrans and contributing almost 58% of the ACT’s own revenue from taxes and charges.
The ACT Executive Director of the Property Council, Adina Cirson, has welcomed commitments by the Government to make improvements to land tax and lease variation charges.
“We are pleased the Government has listened to industry concerns and has committed to looking at longer time period when calculating Average Unimproved Values for commercial properties when setting commercial rates.
“This should go some way to addressing the steep increases in commercial rates which have been experienced as part of the ACT’s land tax reform program.
“A more stable commercial rates regime is vital for business confidence and investment,” Ms Cirson said.
Ms Cirson noted that approaching the half-way mark of the ACT’s tax reform journey, stamp duty receipts have actually increased rather than been reduced, while rates revenue has also doubled during the same period. There will be no review of the $1.5 million stamp duty threshold until 2021.
The Government has listened to community feedback on rating factors for standalone homes and unit titled residential properties and will introduce different rating factors from 2019-20.
Ms Cirson welcomed previously announced steps to making home ownership more affordable, including the full abolition of stamp duty for eligible first home buyers and cuts in stamp duty for all home buyers.
We welcome the already announced addition of six more frontline staff within the Planning Authority to ensure faster processing of Development Applications to deal with significant delays in approvals– but note this will be funded by industry through increased DA fees.
Following industry consultation, the Government has also announced some modifications to the Lease Variation Charge (LVC) process, with a reduced threshold of $50,000 for access to the LVC deferred payment; simplification and consolidation of residential charges; and introduction of an LVC remission for registered community housing providers. The Government has committed to look at further improvements to the LVC for mixed use and commercial property.
Ms Cirson noted that the LVC collected $43m in 2018-19 compared to a forecast of $21m forecast due to a larger than expected number of higher value approvals.
The Property Council has welcomed the $3 billion investment in infrastructure for the ACT, including hospitals, schools, transport networks and roads, including funding to support the planning for Stage 2 of light rail
“In the absence of additional funding from the Commonwealth for infrastructure for our growing national capital, it’s encouraging to see the ACT Government stepping up for the task.
“These investments are essential for building a strong and prosperous Canberra for current and future generations and creating a city that is the envy of Australia for its opportunity and quality of life,” Ms Cirson concluded.
Media contact: Adina Cirson m 0429 579 972 e [email protected]