Compulsory freehold plan axed

Press, 9 March 1982, Page 1

Compulsory freehold plan axed

PA Wellington The Lands and Survey Department has withdrawn its proposal that the holders of 6048 Crown leases in perpetuity should be made to buy the freehold of the land subject to the leases. The proposal drew an angry reaction from farmers and was-not supported by the Minister of Lands (Mr Elworthy). It has been replaced by one based mainly on voluntary incentives. The new proposal includes financial penalties for farmers who do not buy the freehold to their land within five years and Federated Farmers has indicated that it will oppose this provision. The leases comprise the largest number of permanent Crown leases and cover more than 567,000 ha of farm and urban land. The leases are transferred at market prices and very low annual rents are paid on the land. The Director-General of Lands (Mr B. Lucas) told the committee of inquiry on Crown pastoral leases and leases in perpetuity yesterday that after further research the department considered that a scheme of voluntary incentives was more appropriate than one involving compulsion. “This is particularly so because it would be the Crown, not the lessees ...

taking the initiative to introduce change in an effort to protect itself against rising costs in administering leases,” he said. ■ He said that under the department’s new proposal, the lessees could buy the freehold to their land for a concessionary price of 20 times the annual rental, plus a title fee. At the end of five years, lessees who had not bought the freehold to their land would have their annual rent increased sufficiently to recover the department’s cost in administering the leases. This fee would increase each year. This approach would give a significant advantage over present freeholding rights and would least disadvantage lessees who did not buy the freehold to their land. “It could be argued that the Crown would be justified in trying to drive a harder bargain but the department believes that, as it will be the Crown which is initiating changes for its own benefit, a stronger line could well be seen to be unfair,” Mr Lucas said. Under the “20 times” formula, the average price of buying the freehold to a property would be about $lOOO, plus the title tee, based on an average annual rental nf