Growth Area Infrastructure Contribution (GAIC): E-Alert May 2010

Growth Area Infrastructure Contribution (GAIC) Update

On Tuesday, 4 May 2010, the State Government re-introduced into Parliament legislation intended to implement the Growth Area Infrastructure Contribution (GAIC). The legislation represents the second attempt to introduce a GAIC and follows extensive industry and parliamentary consultation.    

The new legislation differs from the first proposal in a number of important respects. This e-alert highlights the changes and provides a brief overview of the new regime.    

As the new legislation has the support of several influential industry groups, it seems more likely to be implemented than the first proposal.   

GAIC Events No change
 
GAIC Rates No change
 
Payment Timing Big changes, 30% compulsorily upfront at first GAIC event, 70% deferrable upon election, Deferral right forfeited if 30% not paid or election not within time
 
PSP Concept Will shape rate of interest payable on deferred GAIC, Deferred GAIC indexed annually at CPI until PSP, After PSP interest at TCV 10 year bond rate  
 
Subsequent Subdivision Deferred GAIC liability payable subject to staging approval
 
Subsequent Sale Deferred GAIC liability transfers with land, New owner can defer upon election
 
Staging Not as of right like deferral, Application to Minister required, Treasurer approval no longer necessary,Staging approval transferable
 
Small Lots Exemption Expanded to accommodate hobby farm and lifestyle properties
 
Superlot Exemption Still not offered
 
In kind Contributions Still not possible

The basic effect of the new regime is that developers can defer 70% of the GAIC until subdivision. Beyond that, the only payment relief available is through staging.

For further information regarding any matter raised in this e-alert, please contact Michael Taylor-Sands or Nick Holuigue.