FREEHOLD OPTION Pilot Project Hammond Poruma St Pauls

FREEHOLD OPTION Pilot Project Hammond, Poruma, St Pauls communities Mayor Frederick Gela November 2015

Why are we here today? • To explain what freehold is and how it could be made a part of Torres Strait communities. • We want to know what you think about freehold – this will help Council decide when the time comes. • You can speak to us directly today or contact Council to discuss later. • Written comments are also welcome: please email freehold@tsirc. qld. gov. au or drop off a letter at your local Council office.

Recap: What is ordinary freehold? • Individual landowner(s) – not communally held • Publicly registered Certificate of Title • Owner(s) responsible for use of the land • Native Title does not apply • Deed of Grant in Trust does not apply • Exclusive ownership • Rateable • “Alienable”/transferrable on open market • Can be mortgaged and leased

Recap: Pros of freehold Pros 1. 2. 3. 4. 5. 6. 7. 8. Native Title and Trustee approval not required for future development or leasing (planning approval may be required). Legal certainty of land ownership. Can be used as a tool to ‘cement’ traditional boundaries via formal Survey. Exclusive control of your own land (as long as you comply with the law). Potential for economic independence (leasing and mortgaging land available). Land/house becomes an asset with a market value on the property market. Ability to transfer freehold title to loved ones under a Will. Ability to hold land with others as co-owners, and decide who will own the land when the registered owner dies. This is not an exclusive list of Pros and Cons and should not be relied upon by potential applicants when deciding whether or not to support/ apply for a freehold grant. Applicants should always seek independent legal and financial advice.

Recap: Cons of freehold Cons 1. 2. 3. 4. 5. Up-front purchase cost Ongoing costs of home ownership Owner is legally responsible for use of the land (and misuse) Traditional rights no longer legally recognised over the land Could weaken Traditional Law and Ailan Kastom in the community 6. Potential sale to non-community members (loss of traditional land) 7. Risk of losing traditional land if unable to afford ongoing costs of home ownership (mortgagee sale) 8. Could make land management in Torres Strait more complicated by adding another type of land holding This is not an exclusive list of Pros and Cons and should not be relied upon by potential applicants when deciding whether or not to support/ apply for a freehold grant. Applicants should always seek independent legal and financial advice.

Recap: What are the options for home ownership? 1. Grant of LHA lease (for valid applications). 2. Apply for a 99 -year home ownership Lease over an existing house. 3. Apply for a 99 -year home ownership Lease and development approval to build a house on vacant land. 4. If freehold is made available, apply for a freehold grant.

Model Freehold Instrument • If the community supports making freehold available, Council’s view (subject to community feedback) is that a Model Freehold Instrument should be done first. • This means that only eligible “interest holders” could potentially be granted freehold. • A Non-Model Freehold process could follow the Model process.

Interest holders • GTA interest holders as at 1 Jan 2015 • LHA entitlement/“Katter” lease holders as at 1 Jan 2015 (native title future act validation may not be required) • 99 -year lease holders as at 1 Jan 2015

The allocation process (Model Freehold Instrument) 1. Application for available land 2. State approves sale of social house on the land (if applicable) 3. Trustee determines the application 4. Offer (including any conditions) 5. Acceptance of offer and cooling off period 6. Allocation of the land (once conditions are satisfied)

Freehold Schedule (map) • If the community wants freehold, which areas should be made available for freehold? • Which areas should not be made available for freehold? • Should a maximum block size be set? • Should there be a limit on how many blocks a person can apply for at one time? • Note: areas in the Planning Scheme that are not “urban” or “future urban” zones cannot be made available for freehold.

Freehold Policy: Eligibility • Default eligibility criteria: The grant of freehold is limited to the following categories of people: • an Aboriginal person or Torres Strait Islander • the spouse of an Aboriginal person or Torres Strait Islander • a former spouse of an Aboriginal person or Torres Strait Islander • a widow or widower of an Aboriginal person or Torres Strait Islander

Discussion: Eligibility • If freehold is made available, should there be any additional eligibility criteria to apply for freehold? • Should there be restricted eligibility criteria for particular areas of freehold option land? • If there is more than one interest holder for the available land, either all interest holders have to apply (if eligible), or all interest holders must agree to the applicant making the application.

Cost to obtain freehold: summary • • House price (State methodology) Land price (cost recovery) Compensation Application fee Cost of survey (if land not yet surveyed) Registration fees (Land Titles Office) Legal costs

House Price Methodology proposed by the State: (The same prices are proposed for 99 -year home ownership leases. ) House condition assessments are currently being conducted in TSIRC communities.

Land Price • Land price is set by the Trustee. • Proposed price structure: $4, 000 for 2, 000 square metres plus $100 for each additional 100 square metres.

Compensation • Option 1: NIL compensation/freehold title as compensation (where applicant is the Traditional Owner of the land) • Option 2: could be calculated based on estimated valuation (land value) + additional special value for native title extinguishment

Application fee • An application fee would be charged by the Trustee to recover costs of administering the freehold option.

Freehold grant could be subject to conditions • The Freehold Policy can state what conditions apply to the available land. • The applicant would be responsible for the cost of satisfying these conditions.

Cost of home ownership: summary • • • Rates & Charges Maintenance Insurance Bills Mortgage repayments

Rates & Charges • Rates are local government fees that are charged to landowners based on the value of the house/land. • Rates will apply to freehold land from 1 July 2016. • Council will set rates at its budget meeting in June 2016.

Home Maintenance Costs, Insurance, Home Loans etc. • The owner is responsible for these costs. • These costs vary significantly depending on a variety of factors. • Prospective applicants for freehold should seek independent advice on the potential costs.

Freehold is optional • It is your community’s choice. • We are not making the decision today. • Let us know what you think of the freehold option today or later. • Written comments are welcome: please email freehold@tsirc. qld. gov. au or drop off a letter at the Council office. Every submission will be considered.

What happens next? 1. Council (Trustee) consultation with community and traditional owners on the Freehold Option. 2. Council (as Local Government) consultation with community on its Planning Scheme. 3. Planning Scheme to be endorsed by Council (as Local Government). 4. Council (as Trustee) to consider whether (and how) to make Freehold available in your community. 5. If Freehold is made available, Council (as Trustee) will run the allocation process. 6. For applications approved by the Trustee, the State will grant the freehold.

Questions and discussion

Eso for coming. We’ll be back soon.