SGS was engaged by the ACT Planning and Land Authority (ACTPLA), to advise on the legislative and operational reforms needed to address a series of problems concerning its betterment capture system and Change of Use Charges (CUC). The ACT Government wished to retain the betterment capture principle, but to also introduce streamlined arrangements to address the system’s deficiencies, which included:
- A lack of certainty and transparency
- That the mechanism did not establish dollar value costs upfront and acted as a disincentive to investors and developers
- That it was too negotiable and lengthened the development application process
- The potential for revenue to be reduced by government policy directions
- That there was insufficient financial return to the ACT Government for the administrative effort expended.
Key aspects of SGS’ work on this project included:
- A review of the existing system including relevant legislation
- Analysis of the volume of transactions attracting CUC and the revenue generated
- Gathering of stakeholder views through face-to-face interviews
- Development of options for reform, including overarching principles for design of the system such as efficiency, transparency and fairness
- An outline for a new model for CUC in the ACT.
Three options were explored for the future development of the CUC system: no change to the existing system; a continuation of the case by case assessment system but with different approaches to calculating property values; and the ultimately preferred option of scheduling CUC’s through accounting for differences in land value across land use types and in geographic submarkets.