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Planning and Environment Amendment
(Growth Areas Infrastructure
Contribution) Bill 2009
Introduction Print
EXPLANATORY MEMORANDUM
General
The objective of the Bill is to make provision for the levying, management
and disbursement of the growth areas infrastructure contribution (GAIC),
which will be a means of funding State infrastructure and associated costs in
growth areas to meet the future needs of those communities. The GAIC is to
apply in a defined contribution area-specific parts of Melbourne's existing
growth areas and any growth areas that may be declared in the future.
The Growth Areas Infrastructure Contribution
The intention to introduce a flat rate contribution towards the provision of
State infrastructure was announced in A Plan for Melbourne's Growth Areas
(published November 2005). The methodology for raising the contribution,
as announced in Melbourne @ 5 million (published 2 December 2008) and
which is used in this Bill, is a simpler and fairer approach compared to that
announced in 2005.
Provisions to impose the GAIC are to be enacted as a new Part 9B of the
Planning and Environment Act 1987. This new Part is to operate in
conjunction with the Taxation Administration Act 1997 (TAA) as it is to be
a taxation law for the purposes of section 4 of that Act. This will enable the
powers, duties or functions of the Commissioner of State Revenue under the
Taxation Administration Act 1997 to equip the State Revenue Office
(SRO) with the necessary powers to collect the GAIC (including, for
example, power to issue assessments, to deal with objections to assessments
and to enforce payment) and to pay it into the relevant account.
The GAIC is a flat rate charge per hectare of land which is to be imposed on
transferees or owners of specified land in the contribution area. It is triggered
in a narrow range of circumstances for certain "GAIC events" and payable
only once. Affected land is identified on maps lodged in the Central Plan
Office and will have a recording placed on title to indicate that the GAIC
561268 1 BILL LA INTRODUCTION 11/11/2009
may be payable. Once the GAIC is paid this recording on the title is to be
removed.
The GAIC is being applied to land that was the subject of the public
announcements made in Melbourne @ 5 million on 2 December 2008 and a
further public announcement on 19 May 2009 (which added a small number
of properties to the Western Investigation Area). The provisions of new
Part 9B are to apply to events occurring after the date of the announcements
but before the enactment of the legislation as well as to events occurring after
the enactment. This element of retrospective application is necessary to
ensure that land speculation ahead of the commencement of the Bill does not
frustrate the intention of capturing a proportion of the land value increases,
that occur when land is designated for urban development, as close to the
time this occurs as possible. The person who is to pay the GAIC relating to
land sale transactions occurring during the transitional period will be the
purchaser.
The Bill provides a number of "exclusions" for certain types of events that
would be otherwise treated as GAIC events. There are also certain
circumstances in which GAIC will not be imposed. Division 3 of Part 9B
deals with exemptions from GAIC and applies many exemption provisions in
the Duties Act 2000. That Division also provides avenues for persons to
seek reductions of, or exemptions, from liability to pay the GAIC. If GAIC
is not payable due to an exemption, liability remains on the land and is
"deferred" to the next GAIC event that occurs in respect of the land. If a
person is granted a reduction from the whole of the GAIC relating to land,
GAIC will not be able to be imposed again in respect of that land.
Expenditure of the amounts raised must be through the growth areas Funds
established by the Bill. There is to be a broad nexus between the raising of
the amount of the GAIC and the purposes for which revenue raised may be
expended.
The GAIC is to be used to provide financial assistance for or with respect to
capital works for wholly or partly State funded infrastructure including
(but not being limited to)--
· transport infrastructure (e.g. major roads, public transport,
walking and cycling);
· community infrastructure (e.g. health facilities, education
facilities, regional libraries, neighbourhood houses and major
recreation facilities);
· environmental infrastructure (e.g. regional open space, trails
and creek protection);
· economic infrastructure (e.g. providing access to information
and technology and infrastructure supporting the development
of commerce and industry).
2
Revenue collected from growth areas must be spent in and for the benefit of
growth areas.
The GAIC will be used by the State in growth areas instead of development
contributions plans (DCPs) made under Part 3B of the Planning and
Environment Act 1987. A DCP may not be used for the purpose of
imposing a development infrastructure levy towards the provision of works,
services or facilities by a Minister or a public authority (i.e. State purposes)
in the contribution area. However, implementation of a GAIC will not alter
the ability of State referral authorities under the Planning and Environment
Act 1987 (such as VicRoads) to seek contributions for works for individual
developments to access State infrastructure networks.
The Bill also amends section 46AP of the Planning and Environment Act
1987 to include the Mitchell Shire Council as a growth area council.
This will enable the Minister to declare part of the municipal district of
Mitchell a "growth area" to which the GAIC may apply.
Clause Notes
PART 1--PRELIMINARY
Clause 1 sets out the purpose of the Bill. The main purposes are to amend
the Planning and Environment Act 1987 to provide for growth
areas infrastructure contributions in respect of growth area land.
Related amendments are to be made to a number of other Acts
that are listed. The details of those amendments are in Part 3 of
the Bill.
Clause 2 provides for the commencement of the Bill.
Clause 2 specifies that the provisions of the Bill come into
operation either on a day or days to be proclaimed or at the latest
on 1 October 2010.
PART 2--AMENDMENTS TO THE PLANNING AND
ENVIRONMENT ACT 1987
Clause 3 amends section 3(1) of the Planning and Environment Act
1987 to insert a definition of urban growth boundary, which was
previously defined in section 46AB of that Act, that section being
repealed under clause 4 of the Bill.
This change allows an urban growth boundary to be specified in
any planning scheme in addition to a metropolitan fringe
planning scheme as defined under section 46AA of that Act.
The Shire of Mitchell is not listed in section 46AA. Unless an
urban growth boundary can be specified in the Shire of Mitchell,
a contribution area cannot exist in that Shire and the GAIC
3
cannot be imposed. In Part 9B, being within an urban growth
boundary is only one of three elements that are required to be in
place so that land will be in a "contribution area" for the purpose
of imposing the GAIC. A change in the urban growth boundary
as it applies to the planning schemes for the metropolitan fringe
councils listed in 46AA requires ratification by both Houses of
Parliament. This requirement will not change. The ability to
utilise the urban growth boundary as a planning tool elsewhere in
the State will not lead to imposition of the GAIC, as the GAIC
can only be applied to the councils listed in section 46AP.
The Bill is only proposing to insert the Shire of Mitchell into that
section. The Government's policy as set out in Direction 2,
Policy 2.1 of Melbourne 2030 (October 2002), is to be able to
apply the urban growth boundary as a planning tool in other areas
of the State. The proposed change will give effect to that policy.
Clause 4 repeals section 46AB of the Planning and Environment Act
1987, which contains a definition of urban growth boundary.
Clause 5 amends section 46AP of the Planning and Environment Act
1987 to add "Mitchell Shire Council".
Mitchell Shire Council is included as part of the review of the
urban growth boundary announced in Melbourne @ 5 million in
December 2008. This amendment would enable the Minister to
declare a growth area in part of the municipal district of Mitchell
to which the GAIC will apply to enable a consistent application
across all areas to be brought within the urban growth boundary.
Clause 6 amends section 46AS(a) of the Planning and Environment Act
1987 to add specific reference to the new Part 9B of that Act
(to be inserted by this Bill). This provision requires that the
Growth Areas Authority carry out any function conferred on it
under this new Part.
Clause 7 amends section 46I of the Planning and Environment Act 1987
to refer to new section 46IA inserted by clause 8 of the Bill.
Clause 8 inserts new section 46IA into the Planning and Environment
Act 1987. This prohibits the use of development contributions
plans to provide for State infrastructure in the contribution area.
This provision will eliminate the possibility of developers paying
more than once for required infrastructure.
4
Clause 9 inserts new Part 9B into the Planning and Environment Act
1987 to impose growth areas infrastructure contributions.
The provisions in this Part are explained as follows.
Section 201R contains definitions for key terms used throughout
new Part 9B such as dutiable transaction relating to land,
significant acquisition, urban development area and urban
growth boundary.
Section 201RA defines GAIC events.
The three types of GAIC events are--
· The issue of a statement of compliance under section 21
of the Subdivision Act 1988. This statement is issued
by a responsible authority (usually the local council)
once an applicant for a planning permit to subdivide
land has met the conditions on the planning permit.
This then allows the applicant to proceed to apply to the
Registrar of Titles (the Registrar) for lodgement of the
plan and then registration on affected titles. It is
intended that the application to lodge for registration
will not be permitted until after the GAIC has been paid
(see clause 20).
This event is included as most subdivisions (except
those being excluded) lead to urban development that
will require significant investments by Government to
provide essential infrastructure over time.
· The making of an application for a building permit
under section 17 of the Building Act 1993. It is
intended that the issuance of a building permit for major
works will not be allowed until the GAIC has been paid
(see clause 15).
This event is included as most major building works
(except those minor works being excluded) create urban
development that will require significant investments by
Governments to provide essential infrastructure over
time.
· The occurrence of a dutiable transaction relating to land
(as defined in section 201R). It is intended that the
Registrar will not accept an application for lodgement of
an instrument of transfer of land unless the GAIC has
been paid (see section 201UG).
5
A dutiable transaction relating to land (as defined in
section 201R) includes a direct transfer of land, a sub-
sale of dutiable property (defined in section 201RD)
and a significant acquisition (of an interest in a land
rich landholder holding land in the contribution area).
The term dutiable property is defined in section 10 of
the Duties Act 2000 to include an estate in fee-simple, a
life estate, an estate in remainder, a Crown leasehold
estate or certain leasehold interests.
These transactions (except certain significant
acquisitions) are subject to duty under the Duties Act
2000. They include a transfer of land, the leasing of
land, a declaration to hold land on trust for the benefit of
another person or a disclaimer of an interest or right
relating to land. The most common form of dutiable
transaction involves a transfer of an estate in fee-simple.
The transfer could be a transfer of full or partial interest
in the estate. A transfer of land in the contribution area,
whether in part or in full, is a GAIC event, which
triggers a liability to pay GAIC. In this instance, the
transferee is liable to pay the GAIC in respect of the
land unless the transfer in the circumstances is not
subject to GAIC or the transfer is exempt from GAIC
under Division 3 of new Part 9B (certain exemption
provisions of the Duties Act 2000 are applied under this
Division--see section 201TB).
These events are included as most dutiable transactions
relating to land (except those being excluded) lead to
urban development that will require significant
investments by Government to provide essential
infrastructure over time.
Section 201RB defines excluded events.
Excluded events provide for some specific scenarios when, what
would otherwise be, on the face of it, a "GAIC event", is not a
GAIC event and therefore there is no liability to pay GAIC.
An excluded event is defined in paragraph (a) to mean the issue
of a statement of compliance for "excluded subdivisions of land"
(see section 201RF). This ensures that the GAIC applies only to
subdivision proposals that will lead to significant new urban
development and consequent demands on infrastructure and does
not capture minor activity.
6
Paragraph (b) defines an excluded event to include applications
for building permits for "excluded building work" (see section
201RG). This ensures that the GAIC applies only to significant
building proposals that will lead to increased demand for urban
infrastructure, and does not capture minor activity.
Paragraph (c) defines an excluded event to include certain leases
over land.
Paragraph (d) relates to events that either occurred or certain
steps had been taken toward the event during the transitional
period.
Paragraph (d)(i) deals with subdivisions where a planning permit
relating to the subdivision was granted before the relevant day
(as defined in section 201R) and had not expired when the
"event" took place. This is to ensure fairness in application by
excluding events that had already obtained planning permission
in the transitional period.
Paragraph (d)(ii) deals with building permits where a planning
permit relating to the building permit was granted before the
relevant day and had not expired when the "event" took place.
This is to ensure fairness in application by excluding events that
had already obtained planning permission in the transitional
period.
Paragraph (d)(iii) deals with a dutiable transaction where a
contract relating to that transaction was entered into before the
relevant day. This is to ensure fairness in application by
excluding transactions that had already been formalised in the
transitional period.
Paragraph (d)(iv) deals with a significant acquisition of land held
by a land rich landholder that occurred or a contract for that
acquisition had been entered into on or before the
commencement of new Part 9B. This is to ensure fairness in
application by excluding transactions that had already been
entered into before the commencement of Part 9B.
Section 201RC sets out the categories of land that make up the
contribution area to which the GAIC applies.
The three categories are--
· Type A land which is currently existing growth area
land;
· Type B-1 and B-2 land which is land identified as being
in an investigation area (these are listed in Part 2 of
Schedule 1); and
7
· Type C land which is land which may become growth
area land in the future.
Subsections (2)-(5) define the land to be included in the
contribution area, as follows--
· Type A--land brought within the urban growth
boundary between 28 November 2005 and 31 December
2006 that is within an urban development area on or
after the first announcement day (2 December 2008) and
includes land zoned for residential, business or
industrial purposes or that s within a Comprehensive
Development Zone, Priority Development Zone or an
Urban Growth Zone in the Victoria Planning Provisions.
This definition excludes any land still zoned for non-
urban purposes, such as a quarry.
· Type B-1--land in the investigation areas 1 to 6, which
is the land in the investigation areas as they were
identified in Melbourne @ 5 million in December 2008.
To be within the contribution area, such land must be
brought within a growth area, an urban growth
boundary and an Urban Growth Zone after the first
announcement day (2 December 2008). All three things
must occur but not necessarily at the same time.
· Type B-2--land in the investigation area 7, which is the
additional land in the investigation areas announced on
19 May 2009. Similarly to type B-1 land, it must be
brought within a growth area, an urban growth
boundary and an Urban Growth Zone after the second
announcement day (19 May 2009). All three things
must occur but not necessarily at the same time.
· Type C--any land, other than type A land B-1 land or
B2 land, which is brought within a growth area and an
Urban Growth Zone on or after the commencement day
(both things must occur but not necessarily at the same
time).
Subsections (2) to (4) are required to enable application of the
provisions to impose GAIC retrospectively.
8
Subsection (6) provides that if any land ceases to be in the urban
development area, the land ceases to be within "the contribution
area". For example, if the land is zoned "Urban Growth Zone"
and it is determined that some or all of the land should be zoned
for a use that does not permit urban development (such as rural
conservation zone), the rezoning will remove the land from the
contribution area and the GAIC will not be imposed.
Section 201RD defines a sub-sale of dutiable property. Part 4A
of the Duties Act 2000 deals with sub-sale arrangements where a
person (first purchaser) enters into a contract of sale of land and
nominates another person (subsequent purchaser) to take the
transfer from the vendor. For the purposes of GAIC, it is the
final subsequent purchaser that is to pay the GAIC--that is, the
person to be registered on title.
Section 201RE defines a significant acquisition. A significant
acquisition includes the acquisition of an interest in a land rich
landholder that results in a relevant acquisition within the
meaning of the Duties Act 2000 and any further acquisition of an
interest in that landholder by any person.
The term land rich landholder (defined in section 201R) is a
landholder that is land rich for the purposes of section 71 of
Duties Act 2000. This includes a private company, a private unit
trust scheme or a wholesale unit trust scheme which has its land
holdings in Victoria with an unencumbered value of $1 million
and its land holdings within or outside Australia comprise 60% of
the unencumbered value of all its property.
The concept of relevant acquisition is set out in the land rich
provisions of the Duties Act 2000. An acquisition of an interest
that of itself is a significant interest occurs where a person and/or
associated person acquires 50% of shares in a private company or
20% of units in a private unit scheme or wholesale unit trust
scheme.
The purpose of the significant acquisition provisions is to ensure
that all relevant property or property related transactions are
captured as a GAIC event.
Land in a contribution area can be owned by an individual or
body corporate such as a company, trustee, or unincorporated
bodies such as clubs. Where land is owned by a body corporate
such as a company or trustee, rather than directly acquiring the
real property of a body corporate such as a company or trust,
parties could indirectly acquire the property by acquiring some or
all of the shares or units in the company or trust. In other words,
this transaction results in the interests in the land being acquired
indirectly. It is necessary to treat significant acquisitions relating
9
to the contribution area land as GAIC events so that GAIC is
payable on transfers of interests in land, whether the interests in
the land are acquired directly or indirectly.
Section 201RF provides for excluded subdivisions of land.
Excluded subdivisions are referred to in section 201RB (excluded
events). They are listed in this section and there are some
examples given.
Section 201RG provides for excluded building work. Excluded
building work is referred to in section 201RB. Building work
with a value of less than the threshold amount (which starts at
$1 million in the 2009/2010 financial year and is subsequently
indexed according to Part 3 of Schedule 1) is excluded.
The threshold amount is high enough to exempt most minor
building projects.
Section 201RH provides that Part 9B is to be read together with
the Taxation Administration Act 1997 (TAA).
Subsection (1) is intended to bring new Part 9B within the ambit
of the TAA. The TAA makes general provision for the
administration and enforcement of taxation laws. The TAA
reflects a modern and consistent approach to taxation
administration, aimed at reducing costs, and easing regulatory
burden for taxpayers. To maintain consistency across taxation
administration, the GAIC will be brought within the scope of the
TAA. This will avoid duplication of administration and
enforcement provisions, and reduces the costs of compliance for
land owners, who may have multiple interactions with the
Commissioner.
Subsection (2) is intended to avoid certain rights, duties and
powers under the TAA from applying to Growth Areas Authority
or Departmental officers. Under the definition of tax officer in
the TAA, any person involved in the administration of a taxation
law will have the powers, functions and duties attributed to a tax
officer under the TAA. Since the TAA is amended to make the
law imposing the GAIC a "taxation law", this definition would
operate to afford officers from the GAA and the Department
involved in the administration or execution of the GAIC with
obligations and powers which are not intended. Such officers
are not directly involved in the administration of a taxation law
(for example, the specific prohibitions and permissions relating
the disclosure of information and corresponding penalties found
in the TAA) and therefore are not a "tax officer" for the purposes
of the TAA.
10
Section 201RI provides that new Part 9B binds the Crown.
The intention is that should a State or local government entity
wish to buy land to which the GAIC would apply, that entity will
be liable for the GAIC in the same way as any other person,
subject to certain exemptions (see section 201TC). This is
required to ensure a level playing field if the land is to be used,
for example, for commercial development.
Section 201S provides for the imposition of the GAIC with
respect to a GAIC event (as defined in section 201RA).
Subsection (1) specifies that, subject to section 201SA, once a
GAIC event occurs, the GAIC liability is imposed unless the
person liable to pay (defined in 201SF) has an exemption from
the liability. An exemption means the GAIC continues to apply
to the land but is not imposed until the next GAIC event occurs.
Subsection (2) specifies that the GAIC can only be imposed once
in respect of any land. Once the GAIC is paid, the GAIC can no
longer be imposed in respect of future GAIC events that occur in
relation to that land.
Subsection (3) provides that if a dutiable transaction relating to
land occurs in relation to a part interest in land or a land rich
landowner and GAIC is imposed, any further GAIC event
relating to a remaining interest in the land or landowner is a first
GAIC event in relation to that interest. Examples are provided.
Section 201SA provides that section 201S does not apply in the
circumstances set out in subsections (1)(a) to (1)(c), which are
ones that would not normally lead to a demand for the provision
of urban infrastructure.
Section 201SB provides for GAIC liability not to have arisen in
certain circumstances. The purpose of this provision is to ensure
that, if a GAIC event does not proceed to conclusion, the liability
will be taken to never have arisen and the GAIC will not need to
be paid. Hence, the next GAIC event will become the "first
GAIC event" for the purposes of section 201S. In these
circumstances, if the GAIC has been paid already, the person
who made the payment can seek a refund under the provisions of
Part 4 of the TAA. The refund is subject to a statutory limit of
5 years.
Section 201SC provides for the GAIC liability to arise when the
GAIC event occurs. This will normally only occur if the event
occurs after the commencement of new Part 9B and at the time of
the event the land relating to the event is in the contribution area.
11
Section 201SD provides for liability for GAIC to arise after a
GAIC event occurs. This provision affects type A, type B-1
and type B-2 land (as defined in section 201RC). It does not
affect type C land. The distinction between this section and
section 201SC is that section 201SD applies to events that occur
in the transitional period. GAIC liability will arise with respect
to GAIC events that occurred between the relevant day (either
2 December 2008 or 19 May 2009) and the commencement day
and also in some cases to GAIC events that occur within the
12 month period after that day.
Subsection (2) deals with Type A land, which is characterised by
its status as land brought inside the urban growth boundary
between November 2005 and December 2006. Owners and
developers were publicly advised in November 2005 that a
development contribution for State infrastructure would be
sought from developments in this area. This provision provides
that GAIC liability arises with respect to GAIC events that
occurred between 2 December 2008 and the commencement day.
The Bill is not imposing the GAIC for events that occurred prior
to 2 December 2008 in respect of this land.
Subsection (3) deals with type B-1 and type B-2 land.
These types of land may exist in the future if land currently
within the "investigation areas" is brought within a growth area,
an urban growth boundary, and an Urban Growth Zone (see the
definition in section 201RC). All three criteria must exist for the
land to be characterised as that type of land but they do not
necessarily have to occur at the same time.
The provisions for type B-1 and type B-2 land are needed to
provide for the various timing scenarios between the
commencement day of this Bill (which can be any date until
1 October 2010-see clause 2) and when land in the investigation
areas may be brought within a growth area, an urban growth
boundary, and an Urban Growth Zone.
Section 201SE provides for the time of occurrence of a GAIC
event. The definition of the time of occurrence of a GAIC
event is critical to establishing when the liability for GAIC
commences and the time within which payment can be made
under section 201SL.
A dutiable transaction relating to land other than a significant
acquisition occurs on the day the transaction (e.g. a transfer of
land) is taken to have occurred under the Duties Act 2000.
For a significant acquisition, that GAIC event occurs on the day
the significant acquisition occurs or if an acquisition occurs over
a period of time, the last day of the period.
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Section 201SF specifies the person who is liable to pay the
GAIC. Subsection (1) specifies that, in relation to a dutiable
transaction relating to land, it is normally the person who is the
"transferee" of that land under the Duties Act 2000. For a
transfer of land this is the purchaser of the land on the instrument
of transfer of the land.
Subsection (2) specifies that, with an application for a building
permit, it is the owner of the land immediately after an
application is made who is liable to pay and in relation to
subdivision approval, it is the person who owns the land
immediately after a statement of compliance is issued.
Subsection (3) specifies that, in the case of a sub-sale of dutiable
property (see section 201RD), the person who is liable to pay is
the subsequent purchaser to whom the property is finally
transferred.
Subsection (4) sets out the position in relation to a significant
acquisition as defined in section 201RE. The person who makes
an acquisition of an interest is jointly and severally liable to pay
GAIC with the land rich landholder and other persons who
acquire interests if those interests are aggregated.
The effect of subsection (5) is that for the purpose of assessing
the liability to pay the GAIC relating to land jointly owned, joint
tenants will be treated as tenants in common in equal shares.
Section 201SG provides for the amount of the GAIC including
adjustment of the amount on an annual basis.
Subsection 201SG(2) sets out the amounts with examples of how
the amounts are to be calculated in various circumstances.
The amount payable for type A land is related to the upper rate
announced in November 2005 regarding a development
contribution for State infrastructure. The rate per hectare for
types B-1, B-2 and C land is an indexation of that earlier rate.
Subsection 201SG(3) indicates that the amount in the 2010/2011
and later financial years will be the "adjusted amount" unless the
Governor in Council fixes a lower amount under section 201SI.
The adjusted amount is either the amount set by the Minister
under section 201SH or the maximum amount calculated in
accordance with the formula in Part 4 of Schedule 1.
Under section 201SH, the Minister may fix a lower annual
increase with the agreement of the Treasurer. For example, for
type A land, if the calculation in accordance with Part 4 of
Schedule 1 increases the amount from $80 000 per hectare to
$85 000 per hectare, an increase of $5000, the Minister can
reduce the $5000 by any amount up to $5000.
13
Alternatively, the Governor in Council under section 201SI may
fix a lower amount in respect of one or more types of land in a
particular growth area that is lower than would otherwise be
applied under section 201SG.
For example, for type A land, if the adjusted amount of GAIC
under section 201SG increases the amount from $80 000 per
hectare to $85 000 per hectare, an increase of $5000, and for
type B-1 land increases the amount from $95 000 to $100 000
per hectare, the Governor in Council may reduce the type A
amount to $70 000 in one particular growth area while leaving it
at $85 000 in other growth areas, and may reduce the type B-1
amount to $98 000 in all growth areas.
201SJ provides that an instrument or statement must be lodged
with the Commissioner for State Revenue evidencing a dutiable
transaction relating to land and is based on sections 14 and 15 of
the Duties Act 2000. However, this section does not apply if
such an instrument or written statement has been lodged in
respect of the transaction for the purposes of the Duties Act 2000
or an acquisition statement for a significant acquisition has been
lodged under section 201SK. This ensures that a person will not
have to lodge evidentiary documents twice with the
Commissioner.
Section 201SK provides for the lodgement of an acquisition
statement for a significant acquisition. The acquirer will have to
lodge an acquisition statement in an approved form with the
Commissioner of State Revenue. This form will contain the
relevant data for the State Revenue Office (SRO) to administer
the GAIC payable. The SRO will only endorse the acquisition
statement upon payment of the GAIC in respect of interest
acquired and issue an appropriate certificate denoting the extent
of interests acquired in the land holder.
Section 201SL provides when and to whom the GAIC is payable.
Subsection (1) deals with payment for liability that arises on the
day on which a GAIC event occurs--which is the normal or
on-going situation. For a statement of compliance and dutiable
transaction events, the liable person will have 3 months to pay
the Commissioner of State Revenue. This is consistent with the
3 months available under the Duties Act 2000 to pay duty. For a
building application event, the person must pay before the
building permit is issued.
14
Subsection (2) deals with the situation of liability arising after the
GAIC event occurred. These situations are set out in section
201SD. For example, an event may have occurred between
2 December 2008 and the commencement day, but liability arises
at commencement day, which is after the event. In these cases
the person liable has 3 months to pay from when the liability first
arose.
Subsection (3) provides that a person may pay the GAIC before
the GAIC event has occurred.
Once the GAIC is paid in full in relation to land, the Growth
Areas Authority will lodge a notice with the Registrar to remove
a GAIC recording on the land.
Section 201SM allows a person who is liable to pay the GAIC as
a result of a dutiable transaction relating to land (defined in
section 201R) to defer payment.
A deferral can only occur if the person "elects" to do so and
submits to the Commissioner of State Revenue a form with the
details required by the Commissioner. The election must be
done before the due date for payment i.e. before the end of the
3 months after the GAIC event occurred. A deferral that involves
more than $2 million will require the agreement of the Treasurer
for the deferral.
Section 201SN imposes a rate of interest on a deferral under
section 201SM. The rate of interest has two components.
The first component is the market rate of interest specified under
section 25(1)(a) of the TAA. This is either the Bank Accepted
Bills Rate or a rate set by the Minister by order published in the
Government Gazette. Section 25(2) of the TAA defines the Bank
Accepted Bills rate as--
"... the average of the daily yields for 90 day Bank Accepted
Bills published by the Reserve Bank of Australia for the month of
May in the financial year preceding the financial year in which
the day occurs."
The second component is either the rate set by the Treasurer
under section 201SO or the "premium rate" of 8 per cent
specified in section 25(1)(b) of the TAA if the Treasurer does not
set a lesser rate.
Section 201SO allows the Treasurer, by notice in the
Government Gazette, to fix a lower premium rate of interest for a
deferred GAIC than the 8 per cent specified in section 25(1)(b) of
the TAA.
15
Section 201SP sets out when the deferred GAIC liability must be
paid. Subsection (1) specifies that for a dutiable transaction
relating to land (except a significant acquisition defined in
section 201RE), the deferred liability plus the accumulated
interest must be paid on or before the first of the following occur
in relation to all or part of the land--
· a subsequent dutiable transaction (other than a
significant acquisition);
· the issue of a statement of compliance relating to a plan
of subdivision; or
· the making an application for a building permit.
Subsection (2) specifies that for a significant acquisition, the
deferred liability plus the accumulated interest must be paid on or
before the first of the following to occur--
· the disposal by the person or an associated person
(defined in section 201R) who also deferred a GAIC in
respect of that significant acquisition, of all or part of
the interest in the land rich landholder (defined in
section 201R);
· a subsequent dutiable transaction relating to land (other
than a significant acquisition) in relation to all or part of
the land held by the land rich landowner;
· the issue of a statement of compliance relating to a plan
of subdivision in relation to all or part of the land held
by the land rich landowner;
· the making an application for a building permit in
relation to all or any part of the land held by the land
rich landowner.
Subsection (2) has an example to demonstrate the working of this
provision.
Subsection (3) provides that the default due date for payment of
GAIC under section 201SL (i.e. the 3 months) does not apply to a
deferral.
Subsection (4) defines building work and subdivision of land for
the purposes of section 201SP and subsection (5) defines the time
at which a dutiable transaction relating to land is taken to occur.
16
Section 201SQ provides for a deferred GAIC liability to be a
charge on the land if the person defaults on payment.
This provision enables the amount outstanding including interest
owed to become a charge on the land. This means that the
Commissioner of State Revenue may recoup the GAIC from the
proceeds of any sale of the land before any other parties have
access to the proceeds.
Subsection (3) limits the liability to pay GAIC, for a "bona fide
purchaser for value" of land subject to the charge, to the GAIC,
including interest, that is shown on a GAIC certificate issued by
the Commissioner of State Revenue under section 201SZF.
This is to ensure that such purchasers are aware of the amount of
the outstanding GAIC, if any, when entering into negotiations to
purchase the land and will not be affected if the amount of the
liability changes due to, for example, indexation after the
certificate is issued.
Subsection (6) provides that once the GAIC is paid, the charge
will then either be removed from the title or a recording made
that the charge has been discharged.
Section 201SR provides for approval by the Minister for staged
payment of the GAIC liability for land subdivisions or building
works, including where the GAIC has been deferred under
Subdivision 3.
Subdivisions
This provision addresses an issue with very large lots where a
GAIC event triggers a liability to be paid "up front" for the whole
of the land whereas the cash flow generated by development of
the land will come over a period of time.
Under section 201RA, once a statement of compliance is issued
for a new subdivision, there is a GAIC event and the person
liable to pay has 3 months to do so (see section 201SL).
Under this provision, the person may apply to the Minister
seeking an arrangement whereby the liability is paid off in stages.
The stages of payment will conform to the proposed staged
development of a plan of subdivision.
The following examples are presented to illustrate how this
provision is intended to work--
Example 1: a 60 hectare lot is to be developed in three
stages. The applicant is confident that the stages can be
delivered to market at specific dates e.g. stage 1
immediately, stage 2 in 3 years and stage 3 in 6 years.
The approval is based on this schedule and payments are
required on dates specified in the approval for each stage.
17
Example 2: a 60 hectare lot is to be developed in three
stages. The applicant wants to develop stage 1
immediately but is unsure of when the market will enable
the other 2 stages to occur. The approval will require that
the applicant seek a "further approval" from the Minister
for the remaining stages although the overall timeframe for
completion of all stages and when final payment is due is
specified.
Example 3: a developer has received a staged payment
approval under scenario 1 above, but then decides that
stage 3 needs to be deferred for 12 months. The developer
will require a "further approval" for that change to the
original approval.
Building works
In this case, the application for a building permit is the GAIC
event under section 201RA. The staged payment approval must
be applied for before the building permit is issued (see section
201SL). As with subdivisions, the building permit must identify
the staging of building works and the staging of payments will
correspond to each stage of those building works.
For example, an application for a building permit indicates that a
development will consist of a number of separate buildings, each
of which will be completed in sequence over a given timeframe.
The stages in the approval are based on this timeframe and
payments are required on dates specified in the approval for each
stage.
Section 201SS provides that the normal time for paying GAIC
does not apply if approval is given for a staged payment.
This provision is required to ensure that the timeframe for
payment indicated in the approval for staged payment overrides
the normal period within which payment must be made as set out
in section 201SL. If a payment is not made in accordance with
the staged payment approval, the outstanding liability becomes
due immediately. Failure to pay the outstanding GAIC would
then be regarded as a tax default and the interest and penalty tax
provisions under Part 5 of the TAA may apply.
Section 201ST provides that interest is payable on GAIC subject
to a staged payment approval. The rate is the same rate that
applies under section 201SN. This ensures that applicants do not
try to use the vehicle of staged payment as an alternative to
commercial borrowings.
18
Section 201SU provides for the Minister to give notice of a
staged payment approval. This provision gives the applicant, the
Commissioner of State Revenue and the Growth Areas Authority
the information required to manage the schedule of payments in
the approval.
Section 201SV provides for the staged payment approval
amounts and interest to be paid to the Commissioner of State
Revenue.
Section 201SW provides for the GAIC that is the subject of a
staged payment approval, to be a first charge on the land if the
person defaults on payments. This provision enables the amount
outstanding, including the interest owed, to become a first charge
on the land. This means that the Commissioner of State Revenue
may recoup the GAIC from the proceeds of any sale of the land
before any other parties have access to the proceeds.
Subsection (3) limits the liability, of a "bona fide purchaser for
value" of land subject to the charge, to pay the GAIC including
interest as shown on a GAIC certificate issued by the
Commissioner of State Revenue under section 201SZF. This is
to ensure that such purchasers are aware of the amount of the
outstanding GAIC, if any, when entering into negotiations to
purchase the land and will not be affected if the amount of the
liability changes due, for example, to indexation after the
certificate is issued.
Subsection (6) provides that once the GAIC is paid, the charge
will then either be removed from the title or a recording made
that the charge has been discharged.
Under section 201SX, the Commissioner of State Revenue may
give certain certificates to persons relating to the GAIC liability
upon a written application in an approved form.
Certificates will be issued by the Commissioner of State Revenue
as evidence that--
· 201SY--certificate of release--The GAIC has been
fully released either through payment of the GAIC or if
liability is fully waived (such as that which would result
from an application for reduction of the whole of the
GAIC being approved by the GAIC Hardship Relief
Board under section 201TJ) or through a combination of
part payment and part reduction.
· 201SZ--Certificate of deferral--where a person has
deferred payment of the GAIC under Subdivision 3.
19
· 201SZA--Certificate of staged payment approval--if
there is an approval for staged payment under
Subdivision 4.
· 201SZB--Certificate of partial release--if the GAIC
has been paid in full for one stage of a staged payment
approval (see section 201SR).
· 201SZC--Certificate of exemption--if there is no
GAIC payable on this GAIC event (but the liability
remains to be paid at a subsequent GAIC event).
· 201SZD--Certificate of no GAIC liability--if the
GAIC is not payable as the event is considered an
"excluded event" (see section 201RB) or the GAIC is
not to be imposed under section 201SA.
Where the GAIC has been paid in full on land, the notice of
GAIC liability on title may be removed. For a staged payment,
the notice on title will be removed in respect of land that is the
subject of the certificate. For an exemption of GAIC liability, the
notice will stay on title.
Section 201SZE provides for the content of certificates issued
under Subdivision 4.
Section 201SZF provides that the Commissioner of State
Revenue issue to a person a GAIC certificate for land in the
contribution area if the person applies in accordance with section
201SX. The certificate would indicate the likely amount of the
GAIC liability for a GAIC event affecting the land in the
application if that event occurred in the same financial year the
application was made.
This is intended to provide some certainty to intending
purchasers of land of the likely extent of the GAIC liability prior
to entering into contracts etc. This certificate will provide
information relating to the land in the application at the time
when it is issued.
Section 201SZG provides for a notice to the Registrar enabling
registration of a plan of subdivision of land or acceptance of a
lodgement of a transfer of land.
This provision provides the mechanism to allow the Registrar to
register a subdivision or instrument for the transfer of land where
the applicant produces evidence that the GAIC has been paid or
an exemption applies to the GAIC payment or there is no liability
to pay the GAIC or there is a staged payment approval for the
GAIC or GAIC has been deferred.
20
Section 201SZH provides for the Commissioner to seek
assistance from the Growth Areas Authority for issuing
certificates.
Section 201SZI provides that a certificate issued under
Subdivision 5 is not to be taken as an assessment for the purposes
of Part 10 of the TAA. Part 10 of the TAA deals with
"Objections, Reviews and Appeals" to assessments or decisions
made by the Commissioner of State Revenue. Certificates under
Subdivision 5 are not an assessment under the TAA.
Section 201SZJ provides for the Commissioner to pay all GAIC
received including interest and penalty tax into the Consolidated
Fund.
Section 201T provides a definition of Board to be used in
Division 3 of Part 9B, which means the GAIC Hardship Relief
Board established under Subdivision 4 of this Division.
Section 201TA provides for an exemption from GAIC for a
dutiable transaction relating to land that is made for no
consideration.
The word consideration has the same meaning as defined in
section 32A of the Duties Act 2000, i.e. the amount of a
monetary consideration or the value of a non-monetary
consideration. For example, if a person agrees to change the
name of the registered proprietor on the title to a property to his
or her spouse, and there is no consideration for this change, then
no GAIC is payable.
Section 201TB provides for exemptions from paying GAIC in
respect of a dutiable transaction relating to land if an exemption
under the Duties Act 2000 would apply in respect of the
transaction.
The following exemptions in the Duties Act 2000 are included--
· section 32--Transfers arising from mortgages of land;
· section 33(2), (3), (5)--Change in trustees;
· section 34(1)(a), (b)--Property vested in an apparent
purchaser;
· section 35(1)(a), (b), (c)--Transfers to and from a
trustee or nominee;
· section 40--Transfer of property from one
superannuation fund to another;
21
· section 41--Transfers to trustees or custodians of
superannuation funds or trusts;
· section 42(1), (2), (3)--Deceased estates;
· section 43(3)--Marriage and domestic relationships;
· section 44(1), (2), (3), (4)--Breakdown of marriage and
domestic relationships;
· section 45--Charities and friendly societies;
· section 45A--Health centres and services;
· section 46(1) and (2)(a), (b), (c)--Cooperatives;
· section 47(2)--Diplomats;
· section 48(a), (b), (c), (ca), (d)--Bankruptcies and
administrations;
· section 48A--Amalgamation of industrial
organisations;
· section 50A--Conversion of land use entitlements to
different form of title;
· section 51--Crown grants and public rights of way;
· section 52--transfers to various Ministers,
Departmental office holders and persons, and statutory
corporations
· section 54(a), (b)--Joint tenants and tenants in
common;
· section 55--Equity release programs;
· section 56(1)--Transfers of farms to relatives or
charities.
Section 201TC provides exemptions from paying GAIC for land
dealings involving the Government.
Section 201RI provides that Part 9B will bind the Crown.
However, there is a need for exceptions in some circumstances,
such as with exchanges of land between public authorities or
municipal councils or the surrender of land to the Crown, where
the transfer takes place pursuant to statutory provisions.
22
The acquisition of land by public authorities and municipal
councils using compulsory acquisition powers is also exempted
from GAIC.
Section 201TD provides an exemption for land transferred into a
complying superannuation fund or transfer of land from a
superannuation fund to a fund beneficiary where there is no
effective change in beneficial ownership of the land.
This provision is required to ensure that a transfer of land from
the owner to a complying superannuation fund and vice versa,
where the land owner is a member of that fund, does not trigger a
GAIC liability.
Section 201TE provides that the Governor in Council may grant
a reduction or exemption of GAIC in exceptional circumstances
but not in respect of GAIC that has been deferred.
Exceptional circumstances are generally unforeseen but may
comprise--
· a matter of metropolitan or regional significance
impacted by the operation of Part 9B; or
· "unintended consequences" of the legislation that results
in undue hardship or inequity.
The Governor in Council will consider a recommendation from
the Minister on the merits of an application. The Minister is
obliged to consult with the Treasurer and the Growth Areas
Authority before recommending either a reduction or an
exemption from GAIC liability.
A reduction may reduce the GAIC liability in whole or in part.
An exemption defers the liability to the next GAIC event
affecting the land.
Section 201TF provides for a reduction of GAIC if there is an
agreement in place in certain circumstances to provide State
infrastructure or funds. This provision only applies to existing
agreements between the Government, or its agencies, and
developers to provide for State infrastructure with such
agreements in place prior to the commencement of new Part 9B.
The classes of agreement specified in subsection (2) are--
· agreements to provide State infrastructure or money or
land for that infrastructure that were entered into prior
to 2 December 2008;
23
· agreements to provide money or land for State
infrastructure that were entered into between either
2 December 2008 or 19 May 2009 and the
commencement day for developments on type A, B-1
or B-2 land;
· agreements to provide money or land for State
infrastructure for developments on type C land that were
entered into prior to the land becoming type C land.
The Minister must seek the agreement of the Treasurer for any
reduction in GAIC liability exceeding $2 million in the case of
certain agreements.
Section 201TG specifies that where either the Governor in
Council under section 201TE or the Minister under section
201TF grants a reduction from a GAIC liability, or the Governor
in Council under section 201TE grants an exemption from a
GAIC liability, a notice must be issued to the applicant that
contains the matters set out in this provision, with a copy to both
the Commissioner of State Revenue and the Growth Areas
Authority.
Section 201TH provides that a person liable to pay the GAIC
may apply to the GAIC Hardship Relief Board for relief. In rare
circumstances, cases may arise where the imposition of the
GAIC liability imposes hardship on the persons liable to pay.
The GAIC Hardship Relief Board is designed to enable those
cases to be fairly heard and relief provided in an equitable
manner.
The Board is prevented from receiving an application that is
made after the date on which the GAIC is payable; however,
subsection (3) enables the Board to receive such an application
after that date in the cases of a statement of compliance for a plan
of subdivision or application for a building permit (only i.e. not
for a dutiable transaction), if the Board is satisfied that
circumstances warrant it.
Section 201TI provides that a vendor may apply to the GAIC
Hardship Relief Board for relief in respect of a transfer of land.
In this case, it is the purchaser and not the vendor that will be
liable to pay the GAIC. However, contracts may have been
entered into during the period prior to commencement of Part 9B,
which contain a requirement for the vendor to pay the GAIC.
In those limited circumstances, where such contracts might give
rise to hardship for the vendor and not the purchaser, this
provision enables the Board to consider the matter and provide
relief to the vendor by way of reduction or exemption of the
24
amount of the GAIC the purchaser has the right to withhold from
the vendor at settlement.
Section 201TJ provides the Board may grant relief.
The provision is intended to enable the Board to provide relief
if the payment of the GAIC imposes financial hardship on the
applicant. The Board has discretion about the amount of and any
conditions to be attached to any relief granted, or it can refuse an
application. The Board cannot grant an exemption of GAIC
liability if the payment of GAIC has been deferred.
For circumstances covered by applications by the vendor under
section 201TI, subsections (3) and (5) apply.
Section 201TK provides that the Board must give a notice of
determination of its decision to the applicant for relief.
Section 201TL provides that a determination of the Board is not
to be taken as an assessment under Part 10 of the TAA. Part 10
of the TAA deals with "Objections, Reviews and Appeals" to
assessments or decisions made by the Commissioner of State
Revenue.
Section 201TM provides for the establishment and procedure of
the Board. This GAIC Hardship Relief Board provision is based
on section 95 of the Land Tax Act 2005 that sets out the
establishment and procedure of the Land Tax Hardship Relief
Board.
Section 201U provides for the Growth Areas Authority to keep a
record of the contribution area.
An important element of the GAIC is that it is generally only
imposed on the occurrence of the first GAIC event. Accordingly,
as a matter of good administration, it is necessary for there to be
a record of land holdings to which the GAIC applies so as to
ensure that each parcel of land in the contribution area is only
subject to the GAIC once.
The Growth Areas Authority is required to maintain a record of
land holdings including all land that is in the contribution area
and of all land that is removed from the contribution area.
Section 201UA provides for access to records and information
relating to GAIC. This provision empowers the GAA to make
information available to specific parties for specified reasons.
Section 201UB provides that the Growth Areas Authority is to
notify the Registrar of Titles of land subject to GAIC.
25
The Growth Areas Authority must lodge with the Registrar an
application to record a notice on the title of land in the
contribution area that the GAIC may be payable.
Section 201UC provides for an application to remove recordings
on land no longer subject to GAIC. Both the Growth Areas
Authority and the Commissioner of State Revenue are required to
apply to the Registrar to remove a recording on land of the GAIC
notification in the circumstances set out in this section.
Section 201UD provides that the Registrar must make a
recording on title to land that may be subject to GAIC.
Section 201UE provides that the Registrar must remove
recordings on title to land not subject to GAIC.
Section 201UF provides that there is no entitlement to
compensation in connection with the Registrar's duties.
Section 201UG provides that the Registrar is not to accept
lodgement of a transfer of land unless accompanied by a notice
from the Commissioner of State Revenue under section 201SZA
or an application from the Growth Areas Authority or
Commissioner under section 201UC.
Section 201V provides for the establishment of the Growth Areas
Infrastructure Fund and Building New Communities Fund.
Section 201VA provides for the application of the Growth Areas
Infrastructure Fund (GAIF) which is designed to be applied to--
· wholly or partly funded State infrastructure in growth
areas, and may include the acquisition of land for such
infrastructure. The Fund cannot be spent outside of
growth areas;
· the payment of the recurrent (operating) costs of any
new public transport service in a growth area for a
maximum of five years. This is intended to enable, for
example, early provision of bus services in newly
developing communities;
· the costs and expenses of the Commissioner of State
Revenue in administration of the GAIC (split between
the GAIF and the BNCF--see section 201VB).
Expenditure of the GAIF will be authorised by the Minister with
the approval of the Treasurer. The Government will consider the
use of the Fund during the annual budget process and allocate
them to meet growth area infrastructure requirements.
Departments and agencies of the Government working with the
26
Growth Areas Authority will provide the Government with
proposals for use of the Fund in line with existing or emerging
priorities.
The expenditure of the Fund will be reported annually (see
section 201VC).
Section 201VB provides for the application of the Building New
Communities Fund (BNCF), which is designed to be applied to--
· wholly or partly funded State infrastructure in growth
areas, and may include the acquisition of land for such
infrastructure. The Fund cannot be spent outside of
growth areas;
· the costs and expenses of the Commissioner of State
Revenue in administration of the GAIC (split between
this Fund and the GAIF--see section 201VA);
· costs and expenses of the Growth Areas Authority.
Expenditure of the BNCF will be authorised by the Minister but
with the approval of the Treasurer required for any amount of
$2 million or more for particular capital works. The Government
will consider the use of the Fund during the annual budget
process and allocate the Fund to meet growth area infrastructure
requirements.
The focus of this Fund will be on projects supporting economic
and community infrastructure in the growth areas.
Local councils and others will be invited to make submissions
to the Government on the use of the Fund. The Growth Areas
Authority will work with local councils and agencies and provide
the Government with an assessment of the submissions in terms
of existing or emerging priorities across the growth areas.
Section 201VC provides for the Department and the Growth
Areas Authority to report annually on GAIC and the growth area
funds.
Clause 10 amends section 202(1) of the Planning and Environment Act
1987 to provide for general regulation-making powers relating to
Part 9B.
Clause 11 amends section 203(1) of the Planning and Environment Act
1987 to provide for fees regulations relating to GAIC.
27
Clause 12 inserts a new section 218 into the Planning and Environment
Act 1987. Section 218 is a transitional provision for the
Governor in Council to fix a lower GAIC amount in the
2009/2010 financial year if considered appropriate.
This provision is required as the ongoing provision at section
201SI requires this lower amount to be published in the month of
June prior to the financial year in which the lower amount is to
come into effect.
Clause 13 inserts Schedule 1, which contains machinery provisions needed
for the operation of the GAIC.
Part 1 of Schedule 1 provides for continuity of definitions from
Part 9B and also establishes that the Treasurer may approve a
construction index. The purpose of the index is to ensure that the
dollar values set out in section 201RG for the value of excluded
building work and in section 201SI for the rates of GAIC change
in line with the actual change in the cost of construction in
Victoria. If this was not done, and the values remained
unchanged, fewer building works would be excluded under
section 201RG and the buying power of the GAIC received
would decline and thus contribute less to the provision of
infrastructure over time. The latter would also be an incentive
for persons to postpone "GAIC events" as long as possible.
The construction index to be used will be chosen by the Treasurer
from an index that is publicly available, such as an Australian
Bureau of Statistics "construction industry output price index"
that measures change over time in the price of new construction
outputs in Victoria other than houses.
The construction index is used in the calculations set out in Part 3
and Part 4 of Schedule 1.
Part 2 of Schedule 1 provides for the definition of "investigation
areas" (section 201R).
These areas were identified in Melbourne @ 5 million
(2 December 2008) and in a subsequent announcement on
19 May 2009. They are the areas studied as part of the
"Delivering Melbourne's Newest Sustainable Communities"
project, for which a "Report for Public Consultation" was
released in June 2009. Land in the investigation areas may by
brought within the urban growth boundary, and, if so, may then
become part of the "contribution area" (section 201RC) to which
the GAIC applies.
28
Part 3 of Schedule 1 provides for the indexation of the threshold
amount for excluded building work used in section 201RG(2)(b).
A worked example is included.
Part 4 of Schedule 1 provides for the formula to be used to
calculate the annual indexation of the GAIC amounts in section
201SG(5)(b). This provision includes a worked example.
PART 3--AMENDMENTS TO OTHER ACTS
Division 1--Amendments to Building Act 1993
Clause 14 inserts a new section 18B into the Building Act 1993.
Division 2 of the Building Act 1993 relates to applications for
building permits under that Act.
Section 18B will require that a building surveyor must notify the
Commissioner of State Revenue of an application for a building
permit to carry out building work on land in a contribution area
(as defined under Part 9B of the Planning and Environment
Act 1987) which has a GAIC notification on the title unless the
application is for building work that qualifies as an "excluded
event" (see section 201RB) or is not subject to a GAIC
(see section 201SA).
It is the application for the building permit that is the GAIC event
and the liability to pay arises at that time. The Commissioner
must be informed of when the event occurs to be able to monitor
whether or not payment was made before the building permit was
issued.
Clause 15 inserts a new subsection (4) into section 24 of the Building Act
1993.
Section 24 of the Building Act 1993 relates to the refusal of
building permit under that Act.
Subsection (4) will require that a building permit not be issued if
a GAIC liability exists on the land the subject of the building
permit application until a certificate is produced that the liability
is paid, or has been exempted or is subject to a staged payment
approval or has no GAIC liability.
This provision will ensure the GAIC is paid when required.
29
Division 2--Amendment to Project Development and
Construction Management Act 1994
Clause 16 inserts a new subsection (4) into section 26 of the Project
Development and Construction Management Act 1994 and
includes a reference to "contribution" in section 26.
New subsection (4) defines contribution to mean a GAIC with
the meaning of new Part 9B.
One of the purposes of the Project Development and
Construction Management Act 1994 is "to facilitate certain
development projects in Victoria".
Section 26 of the Project Development and Construction
Management Act 1994 addresses "Exemption from taxes, rates,
charges etc." under that Act.
Section 26(1) states--
"Despite anything to the contrary in any Act or law, the
Treasurer, on the recommendation of the responsible Minister,
may by instrument--
(a) totally or partially exempt any land, document or
transaction relating to a nominated project from any
duty, rate, tax, or charge levied under any other Act or
law; or
(b) defer the payment of the whole or part of any duty, rate,
tax or charge levied under any other Act or law on any
land, document or transaction relating to a nominated
project.".
Division 3--Amendments to Sale of Land Act 1962
Clause 17 amends section 32 of the Sale of Land Act 1962 to insert new
sections 32(2)(da) and 32(3)(f) which provide protection for an
intending purchaser of land in the contribution area where there
is a GAIC notice on the title. This will enable a purchaser and
vendor to negotiate price with knowledge of whether or not the
GAIC will apply to the land upon its disposition. A vendor who
fails to disclose the relevant information will be subject to the
sanctions imposed in the Sale of Land Act 1962.
30
Clause 18 inserts a new section 50 into the Sale of Land Act 1962 which is
a transitional provision.
Section 50 provides that a purchaser may deduct the GAIC from
the purchase price for contracts entered into on or after
2 December 2008 or 19 May 2009 and before 1 December 2009
if settlement is after commencement of new Part 9B and there is
a term in the contract requiring the vendor to pay the GAIC.
The provision has an accompanying "Note" that explains how
under Part 9B, a vendor may apply to the GAIC Hardship Relief
Board for relief in regard to GAIC deducted under this provision.
The purchaser can only withhold from the purchase price the
amount of the GAIC liability. If this has been reduced by a
decision of the GAIC Hardship Relief Board on application of
the vendor (see section 201TJ), the purchaser can only withhold
the reduced amount.
Division 4--Amendments to Subdivision Act 1988
Clause 19 inserts a new subsection (9) into section 21 of the Subdivision
Act 1988, which requires that a municipal council provide to the
Commissioner of State Revenue a notice stating it has issued a
statement of compliance relating to a plan of subdivision of land
in the contribution area.
This is required as the liability to pay GAIC arises at the time
when the statement of compliance (a GAIC event) is issued
(section 201SE(1)(a)).
Clause 20 amends section 22(1) of the Subdivision Act 1988 to insert new
paragraph (g) to allow the Registrar of Titles to register a plan of
subdivision of land if a notice issued by--
· the Commissioner of State Revenue under section
201SZG, is produced by the applicant that proves the
GAIC has been paid in full or there is a staged payment
approval or an exemption has been approved or the
GAIC was not payable; or
· the Growth Areas Authority or the Commissioner of
State Revenue under section 201UC has made an
application to the Registrar to remove the notification of
GAIC being payable from the land.
Otherwise the registrar must not register the plan of subdivision.
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Division 5--Amendments to Taxation Administration Act 1997
Clause 21 amends section 3 of the Taxation Administration Act 1997 to
amend the definition of tax and insert a new definition of
contribution.
The changes to section 3 of the Taxation Administration Act
1997 are required to ensure that the GAIC is considered a "tax"
within the meaning of that definition in that Act. By making this
amendment the Commissioner of State Revenue will be
permitted to use the provisions in the Taxation Administration
Act 1997 to administer the GAIC as a taxation law.
Clause 22 inserts a new paragraph (cb) into section 4 of the Taxation
Administration Act 1997.
Paragraph (cb) adds the proposed Part 9B of the Planning and
Environment Act 1987 to enable it to be considered as a
"taxation law" for the purposes of the Taxation Administration
Act 1997.
Clause 23 inserts a new paragraph (c) into section 14A(1) of the Taxation
Administration Act 1997. This provision adds the proposed
Part 9B to the list of laws affected by section 14A in the
Taxation Administration Act 1997.
Section 14A provides specific rules for the service of a notice of
assessment or withdrawal on taxpayers who are jointly and
severally liable under certain named taxation laws. In certain
circumstances described in that provision, the Commissioner is
permitted to send a notice of assessment to only one of the
persons who are jointly and severally liable for tax.
The intention of this provision is to avoid the confusion which
may result from the issue of assessments to multiple persons for
the same amount of tax. This provision is also aimed at reducing
administrative costs associated with issuing multiple assessments.
The new provision is to ensure that a notice of assessment or
withdrawal to persons jointly and severally liable for GAIC can
be served in accordance with section 14A of the Taxation
Administration Act 1997.
Clause 24 inserts a new subsection (2) into section 20 of the Taxation
Administration Act 1997.
Section 20 of the Taxation Administration Act 1997 (TAA)
provides that if the Commissioner finds that an amount has been
overpaid, then the Commissioner must refund the overpaid
amount or must apply the overpaid amount against any liability
of the applicant to the State, being a liability arising under, or by
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reason of, a taxation law or another Act of which the
Commissioner has the general administration, and refund any
part of the overpayment that is not so applied.
Subsection (2) exempts new Part 9B from the application of
subsection (1)(d). This still permits a GAIC refund to be made
but does not allow the Commissioner to apply the refund amount
to offset any other tax liability.
This provision clarifies that section 20(1)(d) of the TAA is not
intended to apply to the GAIC. The GAIC is a "special purpose"
tax aimed at providing funding for infrastructure and
development in growth areas to meet the future needs of those
communities. In order to affect this purpose the GAIC is
intended to be paid into the Consolidated Revenue where
special appropriation will direct it into two trust funds.
This distinguishes the GAIC from other taxes administered by
the Commissioner which are paid into the general Consolidated
Revenue. As a result, it is neither appropriate to use refunds of
the GAIC to offset other tax liabilities, nor to offset a GAIC
liability using a refund of tax imposed under any other taxation
law administered by the Commissioner.
Clause 25 inserts a new subsection (6) into section 49 of the Taxation
Administration Act 1997. Section 49 allows the Commissioner
of State Revenue to extend the time for the payment of tax or
enter into an agreement for the payment of tax by instalments.
In practice, this power is exercised in limited, but genuine,
circumstances where a person is unable to meet their taxation
obligations. For example, such arrangements may be entered into
where the reasons for non-compliance are beyond the taxpayer's
control (flood, fire, computer malfunction etc.).
Subsection (6) provides that section 49 does not apply if an
approval has been granted for a staged payment and there has
been no failure to comply with the approval. Normally, once
an assessment is issued, then the entire tax becomes payable.
The intention of the GAIC staged payment approval provisions
are to allow for staged payments of GAIC in line with the
progress of agreed stages of subdivision or of building work.
If the conditions of a staged payment approval are not met, then
the entire outstanding GAIC (including any interest) becomes
payable.
Clause 26 inserts a new subsection (3) into section 55 of the Taxation
Administration Act 1997, which provides for clarification of the
term date of completion of the transaction or act for the
situations arising in new Part 9B.
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Section 55(1) provides that a person required to keep a record
under a taxation law must keep the record for not less than five
years after the later of--
· the date it was made or obtained; or
· the date of completion of the transaction or act to which
it relates.
This provision is intended to ensure that taxpayers keep adequate
records so that the Commissioner of State Revenue is able to
verify that a person has paid the correct amount of tax at some
later point in time. However, a time limit is also imposed to
provide some certainty for taxpayers in regard to their tax affairs,
and to reduce the ongoing administrative burden associated with
keeping records. The "date of completion of the transaction or
act" is different under GAIC for a staged payment approval and
this new provision seeks to ensure this is recognised.
Clause 27 amends section 92(1)(e) of the Taxation Administration Act
1997. New subparagraphs (iia) and (iib) are inserted to add the
Growth Areas Authority and the Secretary to the Department of
Planning and Community Development respectively to the list of
"authorised recipients" in subsection 92(1)(e) for the purposes of
administering Part 9B.
Under section 91 of the Taxation Administration Act 1997 a
tax officer is prohibited from disclosing any information obtained
under or in relation to the administration or execution of a
taxation law, except as expressly permitted by that Act.
Section 92 goes on to prescribe certain circumstances in which
this information can be disclosed and lists certain persons and
organisations who are authorised to receive information under
that Act.
While the Commissioner of State Revenue will administer the
collection of the GAIC, the Secretary to the Department of
Planning and Community Development and the Growth Areas
Authority will have responsibility for the legislation, which
imposes the GAIC. Accordingly, the Commissioner will need to
disclose information related to the administration of the GAIC
both to the Secretary and to the Growth Areas Authority. This
may include, but is not limited to, information in relation to
payments, deferrals, and applications for objection, appeal and
review.
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Clause 28 inserts a new subsection (5) into section 97 of the Taxation
Administration Act 1997.
Part 10 of the Taxation Administration Act 1997 provides
taxpayers dissatisfied with an assessment, and other specified
decisions, with the right to lodge an objection against the
assessment or decision. It also sets out the review and appeal
rights available to a person dissatisfied with a decision on
objection. This Part is intended to be a complete code for
objections, reviews and appeals in relation to all taxation
disputes, and ensures all taxpayers are treated fairly and
consistently.
Section 97 of the Taxation Administration Act 1997 sets out
the grounds for objection. Broadly speaking, it provides that an
objection must be in writing and the grounds of objection must be
stated fully and in detail. Certain grounds have also been
excluded as a basis for exemption. For example, a taxpayer
cannot object to an assessment of land tax on any ground relating
to the value of land if the assessment is based on a valuation
made under the authority under the Valuation of Land Act 1960
(section 97(3)).
The Commissioner of State Revenue intends to provide land
owners with the right to object to an assessment of the GAIC
under the Taxation Administration Act 1997. However, it is
not proposed that the grounds for objection will extend to the
zoning of the land. This is because zoning decisions are made
under various planning schemes, and persons are given the
opportunity to object to zoning decisions when an amendment to
a planning scheme is proposed (see Part 3 Division 2 of the
Planning and Environment Act 1987). It is not intended that
these issues be revisited as grounds for objection to a GAIC
assessment.
Subsection (5) limits the grounds of objection in relation to a
GAIC assessment to certain errors made in administration of
Part 9B or in calculation of the amount of the GAIC or that an
exemption should have applied (in the case of a dutiable
transaction relating to land).
Clause 29 inserts a new section 100B into the Taxation Administration
Act 1997, which requires that the Commissioner of State
Revenue refer an objection to a GAIC assessment to the Growth
Areas Authority before making a determination. The intention is
to ensure that any aspects of the objection that require, for
example, application of land use planning terms or application
and interpretation of spatial mapping techniques, are considered
by a competent authority.
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Clause 30 inserts a new subsection (3) into section 121 of the Taxation
Administration Act 1997.
Section 121 of the Taxation Administration Act 1997 requires
that where the Commissioner of State Revenue is required to pay
any money under that Act (such as for a refund) the money will
come from the Consolidated Fund.
Subsection (3) provides that where the amount to be paid is in
relation to the GAIC, the amount must come equally from the
two Funds established under section 201V in Part 9B. This is
because the income from the GAIC is split equally between the
two Funds.
Clause 31 inserts a new subsection (5) into section 135 of the Taxation
Administration Act 1997.
Subsection (5) states that it is the intention of sections 5, 12(4)
18(1), 96 (2) and 100 (4) as they apply after the commencement
of this clause to alter or vary section 85 of the Constitution Act
1975.
Division 6--Amendments to Victorian Civil and Administrative
Tribunal Act 1998
Clause 32 amends clause 2 of Part 1 of Schedule 1 to the Victorian Civil
and Administrative Tribunal Act 1998 to include in the
definition of taxing Act new Part 9B to allow VCAT to deal with
an application to review a decision of the Commissioner of State
Revenue regarding Part 9B and the provisions of "Part 19--
Taxing Acts" will apply.
PART 4--REPEAL OF AMENDING ACT
Clause 33 repeals this amending Act on 1 October 2011. The repeal of this
amending Act does not affect the continuing operation of the
amendments made by it. (See section 15(1) of the
Interpretation of Legislation Act 1984).
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