Construction Sector Recovery LVC Remission Package
On 25 June 2020, the ACT Government announced a Construction Sector Recovery Package to help construction activity continue in the ACT and support the local economy to recover from the effects of the COVID-19 pandemic.
This measure aims to encourage projects that are shovel ready or able to commence construction by 31 March 2021 to progress.
What does the package mean for you?
This package will reduce the Lease Variation Charge (LVC) payable by up to 50 per cent (capped at $250,000) for developments requiring a lease variation.
Who does it apply to?
The remission is potentially available for any combined lease variation and design and siting Development Application (DA) provided that LVC has not yet been paid (either in full or through the deferred payment scheme).
The remission applies to a LVC that is paid from 25 June 2020 to 23 December 2020 inclusive. The remission does not apply to projects that commenced construction before 25 June 2020. Construction must commence by 31 March 2021 regardless of when the development application was lodged or approved. A LVC is taken to be paid upon successfully entering the deferred payment scheme.
It should be noted that a codified LVC is processed faster than before a value/after value LVC.
How does the remission work?
It must be administered through the deferred payment system. The right to the remission is contingent on construction commencing by 31 March 2021.
Short summary of steps to get the remission
- You must have a DA that includes both a lease variation and a design and siting element. It is okay if the DA predates the disallowable instrument, but the DA must not have expired.
- Assuming you have not already paid the LVC either in full or by entering into the deferred payment scheme (in which case you are not eligible for this remission), you must apply to enter the deferred payment scheme by 23 December 2020.
- Remember that it takes time to get a before value/after value LVC determination, so be sure to get in quickly. To have enough time to apply to enter the deferred payment scheme by 23 December 2020, you are advised to have an LVC determination by no later than the first week of December 2020.
- You must commence construction by 31 March 2021. This does not mean simply erecting a fence, piling some dirt or other minor activity. Rather, it means the commencement of substantial development activity, such as demolition, earthworks, construction of basement or laying a slab.
What does ‘commence construction’ mean?
It means earthworks, excavations, demolition and physical building work.
Preparatory works such as site clearing, fencing and markings will not be considered sufficient to meet the construction requirement.
Who can I contact to make further enquiries?
If you wish to discuss the deferred payment scheme, please email firstname.lastname@example.org or call
(02) 6207 0028.
If you wish to discuss the application of the remission, please call the planning and land authority on 6207 5403 or email ACTPADALeasing@act.gov.au.