Article by Eales & Mackenzie
Following the passing of the Planning and Environment Amendment (Growth Area Infrastructure Contribution) Bill 2010, developers and purchasers of land in Victoria need to consider the potential liability to pay the Growth Area Infrastructure Contribution (“GAIC”). The GAIC is a one off financial contribution to infrastructure and other associated costs in growth areas which, according to section 46AP of the Planning and Environment Act 1987 (Vic) (“the Act”), include:
Cardinia Shire Councile
Casey City Council
Hume City Council
Melton Shire Council
Mitchell Shire Council
Whittlesea City Council
Wyndham City Council
Liability to pay the GAIC is detailed in Part 9B of the Act.
The GAIC for the 2011/2012 financial year is between $82,550 and $98,030 per hectare, depending on the type of land. The amount payable in a financial year will be fixed by the Governor in Council and gazette prior to June 1 before the relevant financial year.
The occurrence of a dutiable transaction gives rise to liability to pay the GAIC. A dutiable transaction includes the transfer of a dutiable property or the acquisition of a significant interest in a land rich landholder. Liability to pay the GIAC also arises as a result of the issue of a statement of compliance in relation to a subdivision and the application for a building permit. These are referred to as a “GAIC event” in section 201RA of the Act.
The GAIC will be payable on the first GAIC event and may only be paid once in respect to any land, unless the dutiable transaction occurs in relation to less than the whole of the interest in the land or in a land rich landholder that owns the land, in which case the occurrence of a dutiable transaction in relation to the remaining interest in the land or in the land rich landholder that owns the land will be the first GAIC event in relation to the remaining interest, resulting in liability to pay the GAIC with respect to that interest.
The GAIC does not apply to land with a total lot area between 0.41 hectares and 5 hectares or land with a total area lot up to 10 hectares where there is a habitable dwelling located on the land on the day of the dutiable transaction.
The transferee or purchaser of the land is liable to pay the GAIC where there is a transfer of land. Where liability to pay the GAIC arises as a result of the issuing of a statement of compliance or the application for a building, the landholder is liable to the pay the GAIC. In the case of a significant acquisition in a land rich landowner, the person making the acquisition and the land rich landholder are joint and severally liable to pay the GAIC.
Under section 201SM of the Act, the person who is liable to pay the GAIC may elect to defer payment of 70 per cent of the GAIC by notifying the Commissioner of State Revenue. Any deferred balance payable is subject to interest and indexation under section 201SMA and the deferred sum of the GAIC becomes a charge on the land (section 201SQ).