Insights Library
Important Amendments to GAIC and Section 35 Plans
The State Parliament has introduced the State Taxation Acts Amendment Bill 2024, which proposes to introduce several changes to the application of a variety of taxes, rates and charges to deliver on a number of 2024–25 State Budget initiatives.
Importantly for developers, there is to be a further amendment to the Growth Areas Infrastructure Contribution (GAIC) regime in the Planning and Environment Act 1987 (Vic) closing a loophole which allowed landowners to minimise their GAIC liability with an appropriate subdivision strategy in cooperation with a public authority.
By way of amendments previously introduced into the Planning and Environment Act 1987 (Vic) last year, a fourth GAIC trigger event was introduced to include the certification of a plan of subdivision prepared under section 35 of the Subdivision Act 1988 (Vic). Previously, such plans did not trigger a GAIC liability as they did not require a statement of compliance be issued.
Despite the introduction of the fourth trigger event, the ordinary GAIC exclusions and exemptions have applied.
In particular, a section 35 plan of subdivision would be an ‘excluded subdivision’ for the purposes of the GAIC regime where the subdivision was carried out by a public authority, or a municipal council, and no additional lots were created.
Accordingly, where the sole purpose of a section 35 plan of subdivision was, for example, to excise roads and reserves from parent parcels of land, the landowner (or the relevant public authority or council) would be able to seek a Certificate of No GAIC Liability from the State Revenue Office in respect of that plan on the basis that the plan was an ‘excluded subdivision’ under section 201RF(c) of the Planning and Environment Act 1987 (Vic).
In response to that practice, the State Taxation Acts Amendment Bill 2024 will amend section 201RF(c) of the Planning and Environment Act 1987 (Vic) to read as follows:
For the purposes of this Part, a subdivision of land is an excluded subdivision of land if—
…
“(c) the subdivision is carried out by a public authority or a municipal council and the following apply—
- all the land to be subdivided is vested in or registered in the name of the public authority or municipal council;
- no additional lots are created by the subdivision; or.
Accordingly, once this amendment is enacted, the exemption will only apply in circumstances where the public authority is already the owner of the whole of the land being subdivided, thus triggering a GAIC liability upon certification in respect of any developer owned land.
Whilst the exemption is set to be amended, we note that section 201S(4) of the Planning and Environment Act 1987 (Vic) may provide some relief in circumstances where on the first GAIC event, the sole purpose of the plan of subdivision is to provide for public purpose land, GAIC is not imposed in respect of that GAIC event to the extent that the plan of subdivision of land relates to any part of the land that is not public purpose land (i.e. the balance land). The next GAIC event that occurs in relation to any part of the balance land will be the first GAIC event for the purposes of the regime.
Other exemptions or available GAIC strategies may continue to apply.
It is expected that this legislative amendment will receive royal assent in June 2024, with the GAIC amendment taking immediate effect.
Best Hooper can guide you through the GAIC regime and the proposed legislative amendments, including advising as to the imposition of GAIC liability, preparing GAIC strategies and applications the State Revenue Office.
Best Hooper is Victoria’s Property, Planning and Land Development Advisory Law Firm and we would be pleased to assist landowners and developers navigate the entire development process.
