The former LNP Government’s rural land reforms have continued to drive new opportunities for landholders in regional Queensland. Since the new freeholding arrangements came into place in July 2014, more than 1,100 applications to freehold grazing or primary production (Category 11) leases across Queensland have been submitted. More than 900 freehold deeds of title have since been issued, with the remainder either being offered pending acceptance, or still being processed.
Understandably, the number of applications has slowed in the last 12 months (120 between November 2015 and October 2016) after the initial rush. However, freeholding a rural lease will continue to be an attractive option for farmers and graziers keen on getting out of the rent cycle to enjoy the benefits of the additional security and certainty that comes with operating on freehold land in Queensland. Thanks to the LNP, this is now a viable option for families on the land.
Instead of asking for the full unimproved capital value (UCV) of a property, the LNP developed a new purchase price mechanism based on a net present value of revenue methodology, which more accurately reflected the Queensland Government’s residual interest in the land. This delivered a fairer, more realistic opportunity to freehold land for rural leaseholders, providing more secure property rights and greater confidence to invest in Queensland’s agriculture sector.
The LNP also halved the percentage rent rate for all Category 11 term leases from 1.5 to 0.75 per cent of UCV and lowered the annual capped increase in rents from 20 to 10 per cent. However, with a long and severe drought breaking in many parts of regional Queensland and the agriculture sector widely tipped to experience a welcome recovery, remaining leaseholders may be well advised to consider freeholding before any increase in property values flows through to rents.
While the LNP removed the onerous conditions imposed on rural landholders by Labor through the Delbessie Agreement and separated the acquisition of land for National Parks from the rural lease renewal process, it is unclear how long the Palaszczuk Government will take to try and undo these reforms, like it has with vegetation management and water planning. There is no doubt the Greens would love to get their dirty hands on the rural leasehold land process all over again.
For term leaseholders where barriers remain to freeholding (such as Native Title), the LNP delivered the rolling term lease initiative, which has given a large number of farmers and graziers across Queensland a much more secure footing, with a longer investment horizon. However, for those leaseholders who have not yet investigated the process to freehold their property, there are compelling arguments to at least explore the opportunity to take advantage of these reforms.