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The lay of the land

11 May, 2009 12:23 PM
CLYDE North farmer Brett Hutchinson's home and the 43 hectares of farmland where he, his wife and two children live are his castle, but government legislation is making it harder for him to reign over his domain.

The farm was rezoned in 2005 into the Urban Growth Boundary, making way for a steep rise in rates that now take about one-third of the farm's gross income.

However, if it becomes untenable to stay, then the Hutchinsons, like other landholders, will have to pay a huge one-off government charge per hectare upon its sale.

The proposed Growth Areas Infrastructure Charge will require landholders with more than .4 of a hectare to pay $80,000 a hectare in GAIC when they sell (if brought into the UGB after 2005) and $95,000 a hectare if brought into the UGB this year.

Mr Hutchinson says he is aware land values increase when rezoned from farming to the UGB, but that may be well less than the proposed GAIC for many owners.

"Our rateable land value is $80,000 a hectare and the GAIC is the same. I can understand that the Government wants to fund infrastructure, but it makes sense to do this at the point of development, not upon the sale of land."

A Government spokesman said the tax was "a flat fee that aims to tap some of the large windfall profits that history demonstrates come when land is rezoned for urban use".

"It is charged at a time when there is a capacity to pay - for example, usually on sale."

An added concern for Mr Hutchinson is that the State Government may compulsorily acquire six hectares of his land to extend Thompsons Road across Cardinia Creek to Pakenham.

"If they divert across our property they will compulsorily acquire six hectares. Based on the rateable value (of $80,000 a hectare) they would pay us $480,000 for the land, but then tax us at the same amount.

"This means our best case is that the Government takes our land and we get a net zero."

Mr Hutchinson said land acquired for public use, such as his six hectares, flood plains, drainage, easement and land put aside as native vegetation should should not be liable for an urban infrastructure development tax.

"The GAIC is the same tax leveraged on a per hectare basis, irrespective of the land value or potential future use," Mr Hutchinson said.

The Government spokesman said the GAIC would be implemented through legislative change, and the issues raised were being considered in the drafting of the legislation.

He said the revenue would be used to build roads, schools, public transport and other vital services in the new growth areas.

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Cause of concern: Brett Hutchinson surveys his land.
Cause of concern: Brett Hutchinson surveys his land.

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