Leasehold system

The Commonwealth owns all land in Canberra. Unlike other cities in Australia, Canberra does not have freehold ownership of land; instead, there is a leasehold system. People buy the right to use leased land for a fixed term, usually 99 years. At the end of the 99 years lease, a new lease will be granted without payment (excluding administrative fees) to the person holding the expired lease, provided that the land is not required by ACT or the Commonwealth (s 254(3)).

The Commonwealth ensured that the form of land tenure in the ACT would be different when it adopted the Seat of Government (Administration) Act 1910 (Cth). Section 9 of that Act states ‘no Crown lands in the territory shall be sold or disposed of for any estate of freehold’. Leasehold tenure was adopted so that speculation in undeveloped land could be avoided, and future increases in the value of land remained in the public purse

The leasehold system also has planning advantages. The government, being the landowner and responsible for development decisions, can try to ensure that planning and development policies are implemented in an orderly and efficient manner. The aim is to avoid the problems apparent in systems used in other states, such as fragmented development fronts and mismatches between the demand for amenities and their provision.

The division of land into national land and territory land is also relevant to the leasehold system. The Commonwealth is responsible for leasing arrangements and management of national land and the ACT is responsible for leasing arrangements and management of territory land. However, there is a complication. Some territory leases may be in designated areas, in which case there is a shared jurisdiction, although outcomes are subject primarily to the NCP and the NCA’s decisions.

Regardless of which type of land is involved, it is essential to consider the provisions of the lease to decide whether or not it permits a particular development proposal to go ahead. Leases contain a permitted use clause that will restrict the purposes for which land may be used and many leases contain other provisions that may affect the design and siting of a development. In some cases it may be necessary to vary the provisions of the lease before a development project can be approved.

Permitted use clauses of leases of land managed by ACTPLA can be varied by lodging a development application with ACTPLA (see Chapter 3 in this Handbook for more information on development applications). Permitted use clauses of leases of land managed by the NCA can be varied by making an application to the NCA.

There is no special form for such an application.