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The secret land rent lender un-veiled!

By johnboy - 23 June 2009 25

The Chief Minister is jumping for joy and announcing that he can finally name a lender willing to be involved in his land rent scheme.

    The ACT Government has welcomed the announcement by Community CPS Australia that it will embrace the ACT Government’s nation-leading Land Rent Scheme.

    The scheme, which allows those on modest incomes to get a foot in the door of home ownership by renting the land component of a house-and-land package, will make the dream of home ownership a reality for more young Canberra families.

    “It is fantastic news that Community CPS Australia, after a rigorous examination of this new lending product, has today formally announced that it will partner with the ACT Government in extending the dream of home ownership to Canberrans on modest incomes,” Chief Minister Jon Stanhope said today.

    With operations in the ACT, South Australia, Western Australia and New South Wales, Community CPS Australia is one of the country’s largest and most influential credit unions, with 175,000 members, 37 branches and 530 employees.

So there we go.

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25 Responses to
The secret land rent lender un-veiled!
YapYapYap 11:51 pm 23 Jun 09

ant said :

YapYapYap said :

That’s because they are tenants. They are are simply renting govt owned land, and like all tenants they pay rent.

Rural lesees “buy” their land and homes, same as other ACT residents. Difference is, they continue to pay rent on the land. It’s an anomaly that was overlooked at some point when ACT residents were absolved from paying rent on their land (which they don’t own, they rent). No one in the ACT owns their land, but some residents also get to keep paying. This Stanhope scheme is rather similar to the original system.

Sorry ant, you’re wrong. The Commonwealth resumed the vast majority rural leasehold land (in fact all, to my knowledge) well before self-govt. Leaseholders were paid what was deemed to fair compensation at the time, and allowed to continue to use those leases under a land rent system. This was done in order that future expansion of the city could go ahead without undue impedance.

If there are any current exceptions to this I’d need to see a copy of the lease to be convinced.

ant 11:27 pm 23 Jun 09

YapYapYap said :

That’s because they are tenants. They are are simply renting govt owned land, and like all tenants they pay rent.

Rural lesees “buy” their land and homes, same as other ACT residents. Difference is, they continue to pay rent on the land. It’s an anomaly that was overlooked at some point when ACT residents were absolved from paying rent on their land (which they don’t own, they rent). No one in the ACT owns their land, but some residents also get to keep paying. This Stanhope scheme is rather similar to the original system.

bd84 11:03 pm 23 Jun 09

peterh said :

how long did it take stanhope to convince them that it was a good idea? and was he still trying to convince them when being asked as to who the lender was?

I wonder what guarantees or incentives Stanhope has provided to them to take part in the scheme..

YapYapYap 10:57 pm 23 Jun 09

ant said :

bTW, rural lesees have always paid land rent, and what a nice rort for the gov’t that was.

That’s because they are tenants. They are are simply renting govt owned land, and like all tenants they pay rent.

ant 10:07 pm 23 Jun 09

bTW, rural lesees have always paid land rent, and what a nice rort for the gov’t that was.

Is there any potential for developers/builders to do their usual thing and take up these blocks and plunk giant yuck-houses on them and flog them off for squillions?

Wraith 9:25 pm 23 Jun 09

Um, Land rent in the ACT, isn’t that what we do now, lease the land. The only difference is we pay lump sum for the lease upon purchase of property, titles are leased, will CPS own the title for 99 years? Can they up the rent then like every other greedy so and so landlord round here at will?

SO is this double dipping on the land revenue? Say it isn’t so…….won’t believe you anyway.

jackal 7:36 pm 23 Jun 09

MrPC said :

I’ve got a question about the scheme – does anyone know what would happen if land prices were to collapse? Would the rent/the buyout figure (to convert the land rent into a standard lease) go down?

I ask because of the following news link suggesting it’s possible house prices may collapse by 40%. http://www.news.com.au/story/0,27574,25666899-462,00.html

In the event of a default under the land rent scheme, the home owner has the same rights to sell the house and land as they would in a normal mortgage. However, when the sale eventuated, the Government (which owns the land) would be reimbursed the full unimproved value of the land first, then the bank would get the rest. Provided the house and land have increased in value at similar rates everyone should be happy. But if the land has increases much more than the house itself, or worse, the house has decreased in value, the bank could be left out of pocket.

MrPC 6:48 pm 23 Jun 09

I’ve got a question about the scheme – does anyone know what would happen if land prices were to collapse? Would the rent/the buyout figure (to convert the land rent into a standard lease) go down?

I ask because of the following news link suggesting it’s possible house prices may collapse by 40%. http://www.news.com.au/story/0,27574,25666899-462,00.html

VYBerlinaV8_the_one_ 6:15 pm 23 Jun 09

Thanks, then, to CPS and the local govt for continuing to prop up property values! Hooray!

djk 4:45 pm 23 Jun 09

“The scheme, which allows those on modest incomes to get a foot in the door of home ownership by renting the land…”

It seems odd that the chief minister doesn’t seem to be aware that the land rent scheme is now open to everyone, not just those on “modest” income. Especially given that it is mainly builders or developers who are going to take advantage of the scheme.

peterh 4:35 pm 23 Jun 09

PM said :

Geez… I’d like to FOI that baby πŸ™‚

wasn’t that what the libs were trying to do in the first place? seems a bit strange to not know who the lender was at the start of the program.

PM 4:27 pm 23 Jun 09

Geez… I’d like to FOI that baby πŸ™‚

peterh 4:10 pm 23 Jun 09

how long did it take stanhope to convince them that it was a good idea? and was he still trying to convince them when being asked as to who the lender was?

SheepGroper 4:06 pm 23 Jun 09

ant said :

I hope they’ve done their maths on this one though.

They probably found a way to benefit both if the land renter was able to meet the payments – and if the renter wasn’t able to. Banks are like that.

ant 3:52 pm 23 Jun 09

Oh, gawd!

CPS began in Canberra many years ago. They were Belconnen United, then Canberra United, then various other things as they grew and grew, they’ve amalgamated with credit unions in other states and i’m not convinced it’s a good thing. They now charge fees. They are still better than banks though, and years ago were the only mob who’d lend me a small amount as a home loan, the banks all found pretexts to refuse.
Paid it back very early, with no penalty either.

I hope they’ve done their maths on this one though.

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