Internal review of lease variation charge is not the right call

But it is short sighted for the government not to allow for a public review process and involve stakeholders and industry groups most affected.

The lease variation charge has been criticised since it was first enacted because it was expected to stifle urban renewal and has not raised the revenue it was predicted to.

Across several years of budgets the ACT government has consistently over-estimated the revenue it forecast from the tax.

And in this year's budget the announcement that the tax would be hiked from October sent shockwaves through the property industry.

The government was forced to give developers a transition period after the sector responded angrily to the news they would now pay a new $30,000-per-unit development tax instead of $7500-per-unit.

Former head of the ACT Property Council Catherine Carter slammed the decision at the time as "a misguided move" that would "stymie sustainable development".

She said a tax take of that magnitude meant it was much more difficult for developers to make the numbers stack up, which in turn would distort investment decisions and impedes the city's urban renewal agenda.

It is unsurprising then that the government should see such a huge increase in applications for land use lease variations before the tax hike took full effect.

The tax is not a good one and it is a pity the government has already ruled out a discussion over whether it should be abolished.

That we should have the lease variation charge or not is apparently off the table.

This is a pity. It is a tax that really appears to be at odds with the ACT government's agenda of growth and renewal.

The government should be doing all it can to increase incentives for renewal projects not to reduce chances that they will be taken on.

This review is the first step in what will hopefully be significant changes to make the situation easier for developers and better for the ACT.