Can you buy land in the ACT?

For all intents and purposes you do own the land. Thius article highlights the reasons for the 99 year leasehold plan.
http://www.prosper.org.au/2008/01/16/canberra/

I think I spotted in there something from the mid 90’s reducing the fee to renew the 99yr lease to 0% instead of the 10% originally proposed.

Other states in Australia have a perpetual lease. Not sure if you ever “own” the land. Maybe some states you do…

In Canberra you buy the land for $XXX,000 and then build on top. The Land Rent scheme, allows you to not pay the large sum of money for the land up front and rent that land for a smaller monthly rate/fee. The scheme had issues with lenders willing to provide finance for it and insurers willing to insure. I think its still limited.

The 99 year lease is correct. A land rent lease is something entirely different.

99 year leases are effectively freehold leases, if such a thing exists in Australia. As the territory is 100 next year, leases will be coming up due and it is expected that the government will just sign off on them all again.

A land rent lease means you commit to pay rent to the government for such time until you convert the lease to a standard lease i.e. 99 year lease. With land rent leases, you still get title, and are subject to most of the privileges standard leaseholders are allowed in terms of land use.

Land rent is hard to get your head around, and you are required to attend a CIT course on the topic before you sign a land rent lease.

Also, vacant land is hard to find in the ACT, as the government only releases it in dribs and drabs. And coming from the U.S, you would find our blocks tiny.

The terms you need to research are ‘leasehold’ and ‘freehold’. Land within the ACT is ‘leasehold’ for a term of 99 years.

When you buy property in the ACT, you are provided a 99 year crown lease over the land. The “lease” has a peppercorn rent of $1/year (from memory) and it effectively allows you to own/control the land and do whatever you want with it (within regulations), including selling. At the end of the 99 years, it will be renewed for another 99 years.. Given that Canberra is 99 now, I’d assume that there would be only a very small number of pieces of land that are remotely close to the 99 years.

With the land rent scheme, you are also provided with a “land rent” crown lease, which is essentially the same as a normal one, except that it has additional terms and conditions stating that you need to pay rent on the land above the usual $1, being the 2% or 4% of the land’s values and that you need to pay it or they can take it from you. Other than that, your legal rights over the land are pretty much the same as normal land. It’s just more complicated with the mortgage arrangements of the land and property between the bank and government if you fail to make payments. You also need to repay the market value of the land to exit the scheme and stop paying rent or when the house is sold, the new owners will need to buy out the land or assume responsibility for making land rent payments.

Opening up a can of worms with this one…

(grabs popcorn)

It’s not just confusing to you… but all said and done – the land tenure is much the same in practice as other States – you have a property right on the lease and should the ACT Government remove your lease, you would be entitled to fair and just compensation under the Constitution.

This webpage sets out pretty much the deal on ACT leases.
http://www.actpla.act.gov.au/topics/property_purchases/leases_licenses/leasehold

I’ve never heard of anyone not having their leases not renewed but that’s largely because developed in the ACT did not really occur until about 1924.

A bit of a history is here to help you get the vibe of leases and why they exist.
http://www.prosper.org.au/2008/01/16/canberra/

I dont begin to understand the land rent program. It looks like someone rents the land at a annual rate – without the need for upfront costs and then can build a house on it. My concern would be that the ability to sell and capture any capital gains (the real reason anyone would buy land/houses) is severely curtailed – consigning low income earners to forever not owning their own house/land. But again, I dont really know the score on this.

Leasehold is a system of land tenure. You buy the right to use land under a lease for a term of 99 years. In every practical way, though, you build your house and own it just as you would anywhere else in Australia.

Provided that the land is not required by either the Territory or Commonwealth, the Territory will grant a new residential lease towards the end of the 99 years, to the person holding the old residential lease, without payment (other than an administrative fee)

Source: http://www.actpla.act.gov.au/topics/property_purchases/leases_licenses/leasehold

Glen Takkenberg
Pirate Party ACT for Ginninderra