How does the Lease Variation Charge reduction affect the cost of Missing Middle development?

Detailed Explanation

The Lease Variation Charge (LVC) reduction reduces the cost of developing Missing Middle housing by lowering the charge payable when a property owner varies their Crown Lease to allow additional dwellings or increased development rights. This helps reduce a significant upfront cost associated with adding more housing on an existing residential block.

The reduction applies to eligible Missing Middle developments in RZ1 and RZ2 residential zones where the Crown Lease is varied to add one or more additional dwellings. Eligible applicants can receive a 50% reduction in the codified Lease Variation Charge.

o qualify, the development must meet the relevant requirements, including:

• the property must be in an RZ1 or RZ2 zone;
• the Crown Lease variation must allow additional dwellings;
• the LVC liability must be deferred on or after 10 June 2026;
• development approval must be obtained before 30 June 2029; and
• all dwellings must be completed and receive a Certificate of Occupancy and Use by 31 December 2030

Overall, the LVC reduction makes Missing Middle development more financially viable by reducing the cost of obtaining additional development rights, helping encourage housing types such as dual occupancies, townhouses, terrace housing, and other low-rise residential forms.