Leasehold land

Leasehold land

Several years ago, AgForce through the Leasehold Land Committee commenced a proactive research and advocacy campaign towards:

  • A simpler and quicker lease renewal framework
  • A fairer rental methodology
  • An affordable rental methodology for both term and perpetual leases

In 2014, Parliament passed the Land and Other Legislation Amendment (LOLA) Act 2014, and introduced regulations which saw significant reform in all of the three above mentioned areas.

The reforms implemented some but not all of the recommendations put forward by AgForce through its Leasehold Land Committee.

The changes are summarised in the table below:

 Lease Renewal ProcessRental Methodology
Freehold Conversion Methodology
Rural Term Lease (including leases on state forestry leases and timber reserves)
New rolling lease framework will extend (roll over) terms for the original base term of that lease - for example, a 30-year lease will be rolled over for 30 years and there will be no limit as to the number of times a lease can be rolled over in this way. 0.75pc of most recent unimproved land value.

Annual cap of 10pc pa
Set using the net present value formula outlined in s22C of the Land Regulation 2009
Rural Perpetual LeaseN/A1.5pc of most recent unimproved land value. Annual cap of 10pc applied from current rents
Set using the net present value formula outlined in s22C of the Land Regulation 2009
Other Term Lease, Licences and PermitsNo change0.75pc of most recent unimproved land value.
Annual cap of 10pc pa
N/A

*Term leases must address costs and compensation of Native Title.

* All leases must pay out State-owned commercial timber on land or reserve the timber to the State under a Forest Consent Agreement registered on title.

* All leases must survey land to freehold standard.

 Frequently Asked Questions


1. What were the changes for term leases?

The government has made significant differentiations between the way it deals with term and perpetual leases. Under the framework, term leases are on lower rents and a cheaper conversion methodology, the latter in recognition of the costs associated with addressing survey and Native Title in order to get term leases to freehold. Term leases will also benefit from the new rolling lease framework which will provide tenure security for up to 50 years at any one time.

2. What are the changes for perpetual leases?

In contrast, perpetual leases extinguish Native Title and usually have a better survey standard - it seems that in recognition of this fact, government has set both its rent and conversion rates at a higher amount - rents at 1.5pc current Unimproved Value (UV) and conversion at 1.5pc UV multiplied by 13.1.

3. How do the rolling leases work?

All term leases (including agriculture, grazing and pastoral land leases including state forests and timber reserves) will be given rolling leases. This means that rural leases exceeding 100ha will not be required to enter into Land Management Agreements at the time of lease rollover. Instead, these leases will be extended (rolled over) for their original term of that lease – for example, a 30-year lease will be rolled over for 30 years and there will be no limit as to the number of times a lease can be rolled over in this way.

 

4. Where can I get more information?

Department of Natural Resources - http://www.qld.gov.au/environment/land/state/leases/



Leasehold land

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