Perpetual leases

Changes to the perpetual lease conversion process were announced on 12 April 2012 by Deputy Premier Andrew Stoner. The information below details the arrangements prior to that announcement and is available for reference purposes only. For the most recent arrangements for conversion of perpetual leases, refer to the frequently asked questions below.

Special purchase offer for perpetual leases

The special purchase offer for perpetual leases has expired and 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 at the concessional price, however, a market-based rent will apply pending the outcome of the application.

An application form 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 and on the frequently asked questions below.

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provides for the continuation and administration of Crown tenures which were already in force under the provisions of repealed Crown Lands Consolidation Act 1913, the Closer Settlement Acts and certain other Acts.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 Crown land (the department's) 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 $412 per annum (plus GST, plus CPI). Where the Authority 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 Department's 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).

Frequently asked questions

Is the government now requiring land management covenants to be applied during the conversion of eligible perpetual leases under the previous government’s Special Purchase Offer?

The NSW Government is no longer requiring the application of land management covenants upon the majority of perpetual leases yet to be converted under the previous government’s Special Purchase Offer. There are circumstances however, where the government has determined it is still appropriate for land management covenants to be applied to converted perpetual leases.

Which perpetual leases will continue to be subject to land management covenants upon conversion?

Those current perpetual leases that have high conservation values and either adjoin or are located within 100 metres of National Park Estate, or that contain or are within 100 metres of wilderness or identified wilderness. These leases will be assessed and land management covenants will be proposed to protect high conservation values. Landholders have the option to accept the covenants and convert to freehold or opt to remain as leasehold.

What will happen to my existing application to convert to freehold?

The department will write to all current applicants giving them the option to complete the conversion under current conditions or withdraw their application and have it considered under a new scheme: If you have made application to convert your perpetual lease under the previous government’s Special Purchase Offer and the lease does not require the concurrence of the Minister for the Environment, you will have the option to convert to freehold with or without land management covenants.

If your perpetual lease does require the concurrence of the Minister for the Environment, you have the option of either converting to freehold with covenants or withdrawing your application to convert and remaining as leasehold subject to market-based rent.

I have already converted to freehold with covenants under the previous government’s Special Purchase Offer. Will my covenants still apply?

Yes, however, as has always been the case, an application can be made to review or alter covenants already placed on the title under the previous government’s Special Purchase Offer. Each application for review of restrictions will be assessed under the new arrangements. An application fee of $356 will apply which will enable the department to assess the application and if approved, create a dealing to remove the restriction from your title. You can elect to either lodge the dealing immediately with Land & Property Information (LPI), which will incur a lodgement fee, or lodge it at a later date when another dealing is occurring in relation to the title of the land.  It is advisable to contact the department's Landscape Services Centre on 02 6883 3317 prior to making an application to remove covenants. The application form, with the application fee, should be lodged with the Landscape Services Centre.

I did not apply to convert to freehold under the previous government’s Special Purchase Offer. Can I still apply?

You can still apply to convert your eligible perpetual lease to freehold, however, your lease will continue to be subject to market-based rent until the conversion is finalised. Leases that are subject to the concurrence of the Minister for the Environment may still be subject to the imposition of land management covenants upon conversion.

Will all converted perpetual leases continue to be subject to a restriction on subdivision or separate dealings?

All converted perpetual leases will continue to be subject to a restriction on subdivision and separate dealings where required. However, an application can be made to remove restrictions where a genuine subdivision is planned. For applications to remove a restriction on subdivision an application fee of $450.00 will apply which will enable the department to assess the application and if approved, create documents for lodgement with Land & Property Information for registration. LPI fees and charges will also apply. Applications for removal of the restriction on separate dealings will require an application fee of $250.00

It is advisable to contact Landscape Services Centre on 02 6883 3317 prior to making an application to remove restrictions on subdivision and/or separate dealings. The application form, with the application fee, should be lodged with the Landscape Services Centre.