ACT Chief Minister Andrew Barr will give the University of Canberra an exemption from paying stamp duty on planned new sub-leases of its land, as the university continues a massive $1.7 billion development in Bruce.
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Mr Barr on Thursday introduced reforms to tax laws in the Legislative Assembly that includes the exemption, which he said had been an omission in other changes to allow the university's development to go ahead in 2015.
The university in 2016 signed the $1.7 billion deal with developers CIC Australia and Peet, to build some 3300 dwellings on the university-controlled land in Bruce, with plans to sub-lease up to 200 blocks a year from 2017.
The bill tabled on Thursday also makes changes to tax laws to better enable Treasury to recoup unpaid tax debts, including from banks funding mortgages over properties; and creating an exemption from land tax for properties rented through community housing providers.
But while the bill creates the exemption for university-owned land, through sub-leases, it would only apply where that land was sub-leased back to the owner of the original crown lease, or the university itself.
It could save the university millions of dollars as it pursues the conversion of the original crown leases into new development leases over the next 15 to 20 years, potentially allowing it to provide cheaper housing than on other land in the area.
The proposal for the exemption was not publicly announced at the time of the 2015 reforms to allow the development to go ahead, nor mentioned during debate in the Legislative Assembly during the passage of those changes.
A government spokeswoman also said estimating the amount of such stamp duty revenue was difficult, given it was difficult to predict how many crown leases would be surrendered to allow development leases to be issued in a given year.
She said the government had always intended to create the exemption, therefore it did not consider any revenue that might otherwise have been obtained as 'revenue foregone'.
The bill's changes will also extend landlords an exemption from paying land tax on properties which are rented through a registered community housing provider at a 25 discount compared to market rent, enacting measures all parties have pushed for for several months.
That measure will be a trial of the proposal for 100 properties across the territory until 2021, funded by about $350,000 in foregone revenue that would otherwise have been earned in land tax, estimates suggest.
New powers to recover tax debts from mortgagees, or financial institutions who hold the mortgage over a property, will also bring the territory's system into line with that already operating in NSW, Victoria and Queensland.
Further debt recovery powers will also enable the government to notify credit providers of the tax debt, and recover unpaid tax debts from the sales proceeds of land owner by a debtor, as well as reduce the base penalty tax rate for unpaid debts from 50 to 25 per cent.
Such powers would only be used on debts worth more than $2000, the ACT Commissioner for Revenue has taken reasonable steps to arrange payment of the debt and the revenue office has given those owing the debt prior notice of the plans to recover the funds.
The commissioner would also, when recovery was imminent, need to be satisfied that recovery was not likely to cause substantial hardship to the debtor or family living in the property as their principal residence.
Under the current laws, if the commissioner is satisfied a taxpayer took reasonable care to pay their debt, no penalty tax is charged.
"The current base rate is 25 per cent for tax defaults, and 50 per cent where a taxpayer fails to take reasonable care to fulfil their tax obligations," the spokeswoman said.
"The amendment to 25 per cent as the default base rate maintains the 50 per cent rate for specific circumstances [such as where the tax default was caused by the taxpayer deliberately delaying payment or information, or where there is repeat tax default]."
