Canberra's Land Rent Scheme Explained: 2% Discount, Eligibility, Income Limits

In short: The ACT Land Rent Scheme lets eligible Canberrans build and own a home while renting the land underneath it from the ACT Government, instead of buying that land upfront. For low to moderate income households it can lower the cost of getting into a home, because you pay an annual land rent (currently a discounted 2 per cent of the land's unimproved value) rather than financing the full land price through a mortgage.

What is the ACT Land Rent Scheme?

The Land Rent Scheme is an ACT Government affordable housing initiative. Rather than purchasing a block of land outright, you take a land rent lease and pay a yearly rent to the Government, calculated on the unimproved value of the block. You still build, own and can sell the house on that land. The goal is to reduce the entry cost of home ownership by removing the need to fund the land component upfront.

You must build a home on the block within two years of the lease being granted.

The 2 per cent discounted rate

Since 1 October 2013, eligible new entrants pay the discounted rate of 2 per cent of the unimproved land value each year. The older standard rate of 4 per cent is no longer open to new applicants. The discounted rate is what makes the scheme attractive for eligible buyers, so keeping your eligibility current matters.

Who is eligible?

• Income test: total household income must not exceed the scheme threshold (in recent years $160,000, increased by $3,330 for each dependent child). Confirm the current figure with the ACT Revenue Office before relying on it.
• You live there: at least one lessee must live in the home once a Certificate of Occupancy is issued.
• No other property: to keep the discounted rate you cannot own other real property, in Australia or overseas.
• Information session: attending a free, compulsory information session is required before entering the scheme.

How the land rent is calculated

Your annual land rent is a percentage of the unimproved value of the block, not the value of your house. At the discounted rate that is 2 per cent per year. Because the unimproved value can change over time, your land rent can rise or fall with revaluations. The rent is payable to the ACT Government for as long as you hold the land rent lease.

Staying eligible

The discounted rate is not locked in for life. If your household income exceeds the threshold for two consecutive years, you acquire other real property, or you stop living in the home, you may have to move off the discounted rate or out of the scheme. Keep your details up to date with the ACT Revenue Office.

Pros and cons to weigh

Potential upside: a smaller loan (you are not borrowing for the land), a lower deposit hurdle, and a faster path into a new home in a growing Canberra suburb.

Things to consider: you pay land rent every year for as long as you hold the lease, the rent can move with land revaluations, some lenders treat land rent leases differently, and you must keep meeting the eligibility rules to hold the discounted rate. Speak with a lender that understands land rent lending and consider independent financial and legal advice.

How to apply

Applications, current forms, income thresholds and information session details are managed by the ACT Revenue Office. Start at the official Land Rent Scheme page, book the compulsory information session, and check your eligibility against the current criteria before committing.

Frequently asked questions

Do I own my home under land rent?

Yes. You own the house you build. You rent the land it sits on from the ACT Government under a land rent lease.

What is the current land rent rate?

Eligible new entrants pay the discounted 2 per cent rate on the unimproved land value. The former 4 per cent standard rate is closed to new applicants.

Can I buy the land later?

Land rent lessees can generally apply to convert to a standard Crown lease, in effect buying out the land, subject to the current scheme rules. Confirm the process and any costs with the ACT Revenue Office.

What happens if my income goes up?

If your income exceeds the threshold for two consecutive years you may lose access to the discounted rate, so keep your information current.

This guide is general information, not financial or legal advice, and figures can change. Always confirm current eligibility, thresholds and rates with the ACT Revenue Office.

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