I’ve got a lender for my land rents! – Stanhope

johnboy 25 February 2009 17

The Canberra Times informs us that Comrade Stanhope’s beloved land rent scheme is not yet singing with the choir eternal.

He says he’s found a bank, a secret bank, willing to lend people money to build a house on rented land.

    Mr Stanhope defended the scheme as a ”fantastic, successful, still-breathing” project.

    He said negotiations with an unidentified bank had led to an agreement ”in principle” to provide home loans for land renters.

    The bank was now waiting for approval from the Australian Prudential Regulation Authority before it came out with the new loan deal.

So assuming the secret bank comes out with a loan product than anyone will want to touch… That just leaves the pernicious matter of suckering in low income earners with a scheme that leaves them mortgaged on a depreciating asset while the Government holds onto the appreciating one.

If anyone who does take up the offer would be well advised to make sure they can move the part of the asset they actually own, is this really an expensive and complicated way to build a caravan park?

Tags

What's Your Opinion?


Please login to post your comments, or connect with
17 Responses to I’ve got a lender for my land rents! – Stanhope
Filter
Order
54-11 54-11 1:52 pm 25 Feb 09

I understand that it is a Nigerian-based bank.

caf caf 1:09 pm 25 Feb 09

No.

PM PM 12:17 pm 25 Feb 09

Anyone heard of a few problems caused by something called “sub-prime”…? Anyone else see any similarities? 🙂

caf caf 11:46 am 25 Feb 09

…and the land rent would increase with increases in the UIV, whereas loan repayments would stay the same.

VYBerlinaV8_the_one_they_all_copy VYBerlinaV8_the_one_they_all_copy 11:45 am 25 Feb 09

Understand that, but if you can buy the land at or about the Unimproved Value, it hardly seems worth renting when the interest cost is only about 5.5% at the moment (and could be fixed for 6 and bit for many years).

I understand what Stanhope is trying to do, I just think that messing around with property values artificially leads to greater unaffordability.

OzChick OzChick 11:40 am 25 Feb 09

^ The standard land rent rate is 4% of the Unimproved Value of the leased land and the discount land rent rate is 2% of the Unimproved Value of the leased land. This information is on the ACT Revenue website.

The difference is you don’t end up owning this land as you are renting it. So the finance that you would require would be for the dwelling only.

MadScotty MadScotty 11:39 am 25 Feb 09

Only in Canberra indeed!
Stanhope just gets loonier and loonier. It still boggles my mind that people in the ACT voted this joke of a party back in.

VYBerlinaV8_the_one_they_all_copy VYBerlinaV8_the_one_they_all_copy 11:18 am 25 Feb 09

From an investors point of view. You can sell the property and only pay capital gains on the appreciating value (if any) of the house and use the land rent payments, general rates, land tax as a tax deduction.

The land rent scheme was open to anyone from 1 January 2009 not just low income earners.

So how do they establish the rental value of the land? And how much would this differ from the cost of borrowing to buy the land outright?

Reprobate Reprobate 11:12 am 25 Feb 09

“ACT Chief Minister Jon Stanhope says an anonymous bank has agreed ”in principle” to offer home loans under the Government’s ailing land rent scheme but cannot say when these loans will become available.”

Does this bank operate out of a white van, that pulled up outside the Assembly with some surplus loans that they didn’t want to take back to the warehouse?

Really John, give up on this stupid idea that does not work and will never work. It’s a classic case of trying to force a nice piece of square peg ideology into a round peg market.

justin heywood justin heywood 10:25 am 25 Feb 09

When someone tells you that something is FANTASTIC! SUCCESSFUL! -but then feels the need to add ‘still breathing’, you get the feeling things might just be a little desperate.

Only in Canberra

Pommy bastard Pommy bastard 10:10 am 25 Feb 09

Mr Stanhope defended the scheme as a ”fantastic, successful, still-breathing” project, which has yet to get off the ground, and is relying on a secret bank which only he knows about.

In other news, Mr Stanhope states that he has found the secret of eternal life, and will be selling it online, once he has found someone to bottle it for him.

Coiming up; “No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?

sepi sepi 10:05 am 25 Feb 09

Jon needs to learn to give up on bad ideas. He should just say red tape has canned this brilliant idea, and instead announce some sort of minor financial package to assist low income earners to pay off their mortgage if they lose their jobs, and be done with this one – it isn’t getting any better.

OzChick OzChick 9:59 am 25 Feb 09

^ From an investors point of view. You can sell the property and only pay capital gains on the appreciating value (if any) of the house and use the land rent payments, general rates, land tax as a tax deduction.

The land rent scheme was open to anyone from 1 January 2009 not just low income earners.

Spectra Spectra 9:57 am 25 Feb 09

Not to mention that fact that with only one bank willing to provide finance to such a property, any notion of competition goes out the window. They want to randomly jack up the rates or add some arbitrary fees? Tough – not like you can go anywhere else.

caf caf 9:51 am 25 Feb 09

I imagine that once you’ve paid off the house, depreciating or not you’re still going to have enough equity to extend the loan to buy the land (assuming that by this time your prospects have improved enough for you to afford the bigger loan).

VYBerlinaV8_the_one_they_all_copy VYBerlinaV8_the_one_they_all_copy 9:34 am 25 Feb 09

It just gets dodgier and dodgier. I wouldn’t recommend anyone do this.

Thumper Thumper 9:28 am 25 Feb 09

I would be extremely wary if I were a low income owner looking at buying through this scheme.

‘Secret’ bank? That should be enough to scare the willies out of most people.

CBR Tweets

Sign up to our newsletter

Top

Search across the site