As readers will be aware, the Growth Areas Infrastructure Contribution (GAIC) regime raises funds for State infrastructure in growth areas by charging a levy on developable land.
Exemptions exist for land that is subdivided for a public purpose and land that is compulsorily acquired.
The State Taxation Acts Further Amendment Bill 2016 (Amendment) proposes to make fundamental changes to the GAIC regime that will impact the availability of these exemptions. There is no commencement date in the legislation but it is listed for consideration (Second Reading) in early December 2016 and could be passed shortly after, subject to Parliamentary sittings.
Subdivision of land for a public purpose
Land that is subdivided for a public purpose will now be subject to GAIC and the required contribution must be paid within 3 months of the issue of a statement of compliance.
In the case of a staged subdivision, the balance of the land will not attract GAIC until it is itself subdivided, sold or an application for a building permit is made.
Where GAIC is triggered by the sale of the land (or another ‘dutiable transaction’) landowners will no longer be required to pay the GAIC liability before subdividing out the public purpose land. Instead, landowners will have 3 months from the issue of the statement of compliance to discharge the liability.
It will be possible to obtain a Certificate of Partial Release in respect of those public purpose lots which have had their GAIC liability discharged.
Compulsory acquisition
There will no longer be an exemption to GAIC liability for land that is compulsorily acquired.
Apportionment of liability
GAIC liability for subdivided land must now be apportioned across the component lots according to area.
What does this mean for you?
- Developers who have prepared GAIC strategies that seek to take advantage of the exemptions will need to revisit these strategies;
- Developers should also be aware of the increased GAIC liability and the relatively short timeframes for payment; and
- Developers should assume they will incur full liability for GAIC and factor this into the purchase price of development land.
How can we help?
HWL Ebsworth Lawyers has advised extensively on GAIC issues. The GAIC legislation is complex. To discuss the ramifications of the Amendment and to revise or develop your GAIC strategy please contact us.
This article was written by Mark Bartley, Partner, James Lofting, Special Counsel, and Alex Gelber, Solicitor.