[Edwin Athaide]

Has any Council entered into a Ground Lease agreement with a developer?.
We are looking for some information relating to rates on a Council Development project.

The project is currently in procurement stage, as we are looking to appoint a Developer. The project will be built under a Project Development Agreement that would umbrella a number of other legal documents. One of these is a Development Ground Lease to the Developer, that would grant them access to Council land for the purpose of construction.

During that time, the Developer will be liable for Land Tax payable on the land. However, the question we are being asked is:

QUESTION- would the Developer also be liable for Council Rates payments in relation to the land for the duration of the Development Ground Lease?

Please note that subject to the approach adopted as to transfer of title, Council will at all times retain title to the land during the construction period, which is likely to be 2-3 years.

[Darryl Telfer]

Once the lease has been entered, it becomes rateable.

Until then its exempt as a public place under s556(1)(a).

A public place is defined in the dictionary as
(d) public land or Crown land that is not:
(iv) land that has been sold or leased or lawfully contracted to be sold or leased,

Public Land is defined in the dictionary as
… any land (including a public reserve) vested in or under the control of the council, but does not include:
(a) a public road, or
(b) land to which the Crown Land Management Act 2016 applies, or
(c) a common, or
(d) a regional park under the National Parks and Wildlife Act 1974.

Once its leased any exemption as above ends.

You would want to make sure the lease provides for the leasee to pay rates, taxes etc. I rather not do this – but if its real a deal breaker (paying the rates), Council might want to consider a donation/subsidy under s356 – all depends on what community benefit value the development is expected to bring.

Regardless of who pays, I reckon its rateable.

[Edwin Athaide]

Thanks Darryl

That is very useful information and thought that would be the case

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