Canberra Liberals treasury spokesman Brendan Smyth. Photo: Karleen Minney
The ACT opposition has seized on lower-than-projected revenue from the Lease Variation Charge as evidence that the tax should be scrapped.
But the government has defended the charge and dismissed the relevance of a single quarter's tax revenue.
The Property Council last week complained that the Lease Variation Charge and commence and complete fees on developers could stymie proposals for more development in Civic.
The opposition on Sunday said the tax was also failing to meet revenue projections.
In the September quarter, the government earned $2.7 million from the Lease Variation Charge, down from a projected $4.4 million. It hopes to earn $17.4 million from the charge in 2013-14.
Liberal treasury spokesman Brendan Smyth, pictured, said the Lease Variation Charge was a failure.
''If we're going to have a City Plan that works, than the lease variation tax is a very, very bad tax. It is the
greatest impediment to this city having a true city heart,'' Mr Smyth said.
"A lot of developers are simply saying to us that their developments don't work and the banks won't lend against it because the lease variation charge changes the numbers so much.''
Treasurer Andrew Barr rejected the criticism, saying lease variation revenue was subject to cyclical fluctuations and can vary from quarter to quarter.
Mr Barr said all the revenue raised from the charges went into the Urban Improvement Fund.
"The government's view is that it is only fair that developers put something back to ensure Canberrans have a great place to live,'' he said.
"Developers make windfall profits when a lease is varied for redevelopment - it is fair and reasonable that some of that benefit is shared with the community at large.''
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