I am currently reading Streets Ahead by Wakelyn and I notice that in Canberra the property remain under leasehold rather than freehold for maximum of 99 years. I am a bit curious. What happens after the time frame is up and the capital improvements on the land?
I have no idea what the answer is to your question - sorry.
But whilst lying in bed with the flu today I was reading John R Burley's Money Secrets of the Rich he mentioned that as the land in Canberra is leasehold it is the only State/Territory in Aust that stamp duty is fully tax deductible. Got to be a plus.
BKH, I'm not really sure what happens to ACT properties after 99 years.
If you were buying in Gungahlin, I'm sure it would not be an issue there.
I seem to remember something vague about the issue coming up in Yarralumla- properties which only had 30 years to go. My vague memory is that the 30 year lease was being renewed. But that was a long time and many schooners ago.
The stamp duty on an investment property is claimable in the first year. That's the plus.
But the minus is that, for a rental property, land tax is payable, no matter if that's the only property you own in the ACT.
I just received my land tax and rates notices yesterday.
The Unimproved land tax has gone up 30%- expected in this climate I guess.
Land tax is based on the new value (or the last 12 months, or something). But rates are based on the average value for the last 3 years. So in a rapidly climbing market as we've had, land tax is a big hike as compared with rates.
I have friends who buy a property in the ACT to live in. But they rent it out for 12 months to claim back the stamp duty deduction, and move in after that.
Provided that the land is not required by either the Territory or Commonwealth for public purposes, the Government will grant a new residential lease towards the end of the 99 years, to the person holding the old residential lease, without payment (other than an administrative fee). This gives the lessee continuing security of tenure."