Own your own home, rent the land, save thousands!

The ACT Land Rent Scheme allows Australians to rent land from the Canberran Government, build their own home and save thousands in upfront costs.

It was introduced to combat the ACT’s housing affordability crisis amd help low income earners to own their own home and eventually buy the land at a later date.

A few things have changed when it comes to qualifying for the land rent scheme so read on to find out how it works and whether you can get a home loan.

Can I still get a home loan?

Yes! Construction loans to build a property or standard home loans are available.

  • Borrow up to 95% of the property value for an existing land rent scheme property.
  • Borrow up to 100% of the purchase costs with a guarantor.
  • Get the same interest rates as if you were buying a standard property.
  • You will need to liaise with the ACT Revenue Office when transferring the land rent lease into your name. A duty will apply.
  • Speak to us if you’re planning on asking a loved one to as guarantor for your construction loan.
  • Cost plus construction loans are available.

Please call us on 1300 889 743 or complete our free assessment form today.


What is the ACT Land Rent Scheme?

The land rent scheme forms parts of the ACT Government’s Affordable Action Plan under the Land Rent Act 2008.

It was introduced as a way to assist low to moderate income earners to own their own home.

Instead of buying land under ACT crown lease arrangement, you rent unreleased land from the Land Development Agency instead.

In recent times, the government has cracked down on investors using it as an investment strategy since you cannot own any other property to qualify for the scheme.

In addition, the ACT Revenue Office takes into account your gross income to ensure that high net worth individuals don’t take advantage of the scheme.


What do banks think about construction loans?

There are no restrictions on construction loans to build on land that falls under the ACT land rent scheme.

Bear in mind that the lender may require all lessees to be on the mortgage title.

It pays to have a specialist mortgage broker on your side when building a property because the process can be quite complex. Most brokers don’t get it!

We recommend that you save as much as you can during the construction process to avoid running into any shortfall in your funds.


Can I qualify for the First Home Owners Grant?

Yes! You can still apply for the ACT First Home Owner Grant.


When do I need to start building?

You will be required to commence building within one year of signing the lease, with construction to be complete within two years.

During this time, you need to pay land rent to the ACT Revenue Office even


Are there any rules when it comes to building a house?

The size and design of the property you intend to build will need to meet the current Territory Plan.

You can contact the ACT Planning and Land Authority (ACTPLA) for further details, however, your builder or architect should be across the current requirements under the land rent scheme.


What if I’m buying an existing property?

You would pay for the market value of the property although this will vary based on negotiations with the vendor/land rent scheme tenant.

For the land itself, a security payment of $2,000 will need to be paid.

This security payment remains with the Land Development Agency (LDA) until the block has settled and is then transferred to the ACT Revenue Office and credited towards your first year’s land rent payment.

The security payment is non-refundable in order mitigate against the risk of purchasers choosing not to proceed with the contract. It’s also designed to deter investors from land banking.

You should ensure that any land rent credit is taken into account during negotiations for the purchase.


What are the other costs to keep in mind?

Apart from the security payment,you will pay land rent of 2% of the value of the unimproved land per annum.

Land rent is typically charged quarterly, although you have the option to pay weekly, fortnightly or monthly to better match with your other ongoing costs such as your mortgage and bills.

The duty payment is due within 90 days of the exchange of contracts unless you’re eligible to defer the payment.

There are duty concessions available via the Home Buyer Concession Scheme for eligible applicants. Check with the ACT Revenue Office for details.

Apart from that, standard council land rates and tax applies.


Will the ongoing land rent stay the same?

Despite growth in land valuations and rental rates in ACT, annual rent increases are capped as per the Australian wages price index.

Bear in mind, you will be charged interest if you are late with your rent.

This is based on any amount that remains unpaid and it compounds on a monthly basis.


Do I qualify?

As of 1 October 2013, applicants need to meet the following criteria to qualify for the scheme:

  • The total gross income for you and your partner cannot exceed $160,000.
  • The income threshold increases by $3,330 for each dependent child.
  • You cannot own any other property while leasing the land.
  • At least one of the applicants must reside on the land once a Certificate of Occupancy has been issued.

If you believe you meet this criteria, print and fill out the ACT Land Rent Scheme and attend the compulsory information session at the Canberra Institute of Technology (CIT).

If your application is successful, you’ll be issued with what is known as a Land Rent Crown Lease.

Bear in mind, you have to continue to meet the above criteria and confirm by 30 September each year that your annual income has remained under the applicable income threshold using the Discount Land Rent Application Form.


Do I own the land?

Your name will be on the Land Rent Crown Lease meaning you have title to the land.

You have the same rights as someone who holds a traditional Crown Lease including the right constructing a property and landscape.


How long does the application process take?

It typically takes 10 working days to process an application.


What if I no longer qualify for the scheme?

If you no longer qualify under the scheme, you will lose your right to own the lease and will be required to transition out the scheme over the next two years.

This transition can be done in three ways:

  • You can choose to buy the land outright from the Government.
  • Transfer the lease to another eligible applicant.
  • If you become eligible again, you can actually contact the ACT Revenue Office in regards to rejoining the scheme.

Get independent legal and financial advice

It’s recommended that you speak with an accountant, a solicitor and a financial adviser before signing up to the ACT Land Rent Scheme.

When it comes to applying for a construction, it pays to speak to a specialist mortgage broker rather than going to the bank directly.

We can help find you a lender that will approve your loan and offer you a great interest rate.


Are you looking to rent ACT crown lease land?

Read this information sheet for more details on the scheme.

If you need a home loan or a construction loan, please call us on 1300 889 743 or complete our free assessment form to speak with one of our mortgage brokers.

  • Liu

    I’m also considering just buying an ACT property and renting it out. Do banks have a problem lending to leasehold properties?

  • Hello Liu,

    Banks accept properties in the ACT even if they are actually leasehold as unlike leasehold properties elsewhere, there are no restrictions on the length of lease remaining. A Canberra property is treated like any other freehold property for lending purposes.

  • J Lee

    Are there any solicitors that you brokers at Home Loan Experts recommend?

  • Hi J Lee, we recommend considering the services of the experienced legal practitioners at Paradigm Legal who provide conveyancing services across both NSW and the ACT. You can find out more about them here:
    https://www.homeloanexperts.com.au/recommended-conveyancers/act-solicitor/

  • Lucille

    Hi, where can I see which houses or blocks are available under this scheme?

  • Hi Lucille,
    I’d recommend that you search for vacant land on realestate.com.au and put in a keyword “rent” in your search. Best of luck.