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Perpetual leases
March 2009 - extension of special purchase offer for perpetual leases
The special purchase offer for perpetual leases has been extended until 30 June 2009.
After this offer expires, those leases which are not subject to an application for purchase will have their annual rent changed to a market based rent.
Perpetual leaseholders will still be able to apply for purchase of leases after 30 June at the concessional price, however a market based rent will apply pending the outcome of the application.
An application form (PDF 77 kb) for conversion should be lodged with a local Lands office as soon as possible, together with the prescribed fee. More information is available in the Perpetual Lease Purchase Application Kit (PDF 212 kb) and on the Perpetual Leases Q&A page.
Leases under the Crown Lands (Continued Tenures) Act 1989
The Crown Lands (Continued Tenures) Act 1989 provides for the continuation and administration of Crown tenures which were already in force under the provisions of repealed Crown Lands Consolidation Act 1913, the Closer Settlement Acts and certain other Acts. Holdings are no longer granted under this legislation (see Crown Lands Act 1989 for new holdings).
Conversion of perpetual leases to freehold
In recognition of the very limited equity still held by the Crown in these perpetual leases, the NSW Government introduced reforms on 1 July 2004, to simplify their administration and to encourage holders of these leases to purchase the remaining equity. This offer applies only to perpetual leases which are not subject to redetermination of rent and where the rent is based on the statutory minimum (generally $100 plus CPI) increases from 1 May 1990.
The benefit to landowners is that they will be able to convert to freehold at a lower than market price. The aim of the reform process is to place ownership of the land into the hands of those who already control it.
Holders of these leases have been invited to convert their land to freehold at a special purchase price being the lesser of either 3% of the value of the land (as the residual interest the Crown holds in the lease) or the notified value recorded in the Departments records (generally the value of the land when it was opened up for settlement). Leaseholders who do not apply to convert before this date will be liable for rent, based on the market value of the land, rather than the current low Crown rent. The minimum rent for all holdings will not be less than $440.00 per annum (incl. GST, plus CPI). Where the Department identifies conservation values, a covenant to protect the values will be imposed.
Unless the lease is in an urban area, a restriction on subdivision, and/or restriction on separation of multiple lots, will be imposed on conversion to freehold.
In some cases where retention of the land in public ownership is the best option, the application for conversion may be refused and the land reserved from sale (for Crown Lease, Settlement Lease, Prickly-Pear Lease or Special Lease). In other cases, purchase of the land from the leaseholder by the Government may be possible but this will involve payment of market value or sale negotiated with the landholder.
Other Continued Tenure leases
Perpetual Leases where the rent is redetermined, Term Leases (Conditional lease, Crown lease and Prickly-Pear leases held for a term of years) and Special Leases which are held in perpetuity are also subject to the Crown Lands (Continued Tenures) Act 1989. The holder of one of these leases may lodge an application for conversion but the special purchase price is not applicable for these leases. The purchase price will be: either the notified value recorded in the Departments records, or the market value of the land.
The previous provisions for payment of the purchase price over a period of up to 32 years is no longer available for any lease purchased under the provisions of the Crown Lands (Continued Tenures) Act 1989 where the application for purchase was lodged after 30 June 2004 and the purchase price is payable in full generally within 6 weeks of the date of the approval or other title commencement date as allowed in the legislation.
As with any Crown land, the amendments to the Crown Lands Acts empower the Minister to impose covenants for the protection of the environment and other conservation values by a restriction on use, a public positive covenant or by restriction on subdivision of the land (including restriction on subdivision of multiple lots comprising a former lease).
