On 26 May 2010 the Victorian State Government passed the Growth Areas Infrastructure Contribution (GAIC) Bill.

We refer to our previous update sent on 22 October 2009 for substantive details of the Bill.

The Bill was amended to reflect the Government's Memorandum of Understanding with the Property Council of Australia and the Urban Development Institute of Australia after being put before a Dispute Resolution Committee. The key amendments to the previously considered Bill include:

  • Developers will pay 30 per cent of the GAIC liability when they purchase land, with the remaining 70 per cent to be deferred and paid in stages as the land is subdivided.
  • The outstanding balance will be indexed at the CPI index until a Precinct Structure Plan is gazetted for that area at which point any amount deferred will accrue interest at the Treasury Corporation of Victoria 10 year bond rate.
  • GAIC is not payable on lots of 0.41 hectares or less.
  • GAIC is not payable on the sale of lots of 10 hectares or less (up from 2.03 hectares) where there is a habitable dwelling, but is payable if the land is subdivided or developed.
  • GAIC is not payable on the sale of lots of 5 hectares or less (up from 2.03 hectares) where there is no dwelling on the land, but is payable if the land is subdivided or developed.
  • 50 per cent of GAIC revenue will be used for delivering public transport infrastructure in the growth areas with the remaining 50% to go to other regional community infrastructure such as health services, libraries, and sporting grounds.
  • The Treasurer's approval is no longer required for deferral of a contribution that exceeds $2 million.
  • In certain situations, where a party buys land that is subject to the GAIC, defers 70 per cent of the contribution and then sells the land to another party during the deferral period, the liability plus any interest payable will pass to the purchaser.

The government expects to receive $1.2 billion from the GAIC and has committed to set aside a further $1.2 billion for community infrastructure such as child care facilities, sporting grounds and libraries.

The next step for the Government is to reintroduce the amendment to expand Melbourne's urban growth boundary, facilitating an additional 24,000 hectares of land for development. The amendment will also put in place public acquisition overlays to establish the proposed 15,000 hectare grassland reserve, the Regional Rail Link and the Outer Metropolitan Ring / E6 Transport Corridor.

This is a complex piece of legislation and there are a number of exemptions and differing treatments in the application of the legislation. Each situation needs to be specifically considered to determine the actual GAIC liability. We strongly recommend you obtain advice prior to the sale, subdivision or development of any land within or proposed to be brought within the growth areas.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.