A Western Australian parliamentary committee is examining whether the state should let people lease residential land from government and own only the house that sits on it.
The Legislative Assembly Public Accounts Committee commenced its inquiry into land rent schemes on 25 February 2026. Submissions closed on 8 May and 93 have been published. The committee took evidence in June and again in early August, and is due to table its report on 19 November 2026.
Nothing has been decided. No scheme exists. No government commitment has been made. What exists is a formal examination of a tenure model that would change who the buyer is at the front of a residential build, and how that build gets financed. It arrives at a point where every state is testing new levers on housing supply and affordability, and where most of those levers touch finance and planning rather than tenure.
What a land rent scheme actually is
WHAT IS A LAND RENT SCHEME?
A land rent scheme is a housing model in which a household leases the land from government and owns the dwelling built on it.The resident pays an ongoing land rent charge instead of buying the land outright. Because the land cost is removed from the purchase, the household finances only the dwelling and the associated transaction costs.The Australian Capital Territory Land Rent Scheme is the established Australian example.
That is the whole mechanism. Everything else is design detail.
For a builder, the relevant part is what it does to the cost stack. The land component drops out of the buyer borrowing requirement. The construction component does not. The household still needs to finance a house, and still needs someone to build it.
The ACT is the reference case
The committee has named the ACT Land Rent Scheme as its example, and most of the evidence has been tested against it.
Under that scheme, lessees rent land from the territory government and pay an annual land rent charge calculated on the unimproved value of the block. The ACT Revenue Office states that lessees do not need to finance the cost of the land. They finance the duty on the lease grant and the construction of the home.
Conveyance duty is still payable on the grant of the land rent lease, and it is calculated the same way as any other residential property transaction. There is no additional discount for the value of the land.
Access has been restricted since 1 October 2013. New entrants must qualify for the discounted rate of 2 per cent of unimproved value. The standard 4 per cent rate is closed to anyone entering the scheme after that date.
Eligibility is reviewed every year. A lessee who exceeds the income threshold for two consecutive years, acquires other real property, or stops living in the home must transition out. The threshold from 1 July 2023 is $170,000 in total gross household income, rising by $3,330 for each dependent child up to five children. Annual rent increases are capped by wages growth. A lessee can convert the land rent lease to a nominal Crown lease at any time, priced on the unimproved value at the date of conversion, with land rent already paid not credited towards the conversion amount.
What the WA committee has been asked to examine
The terms of reference are narrower than the general affordability debate surrounding them.
The committee is examining feasibility for moderate and middle income households, and has explicitly excluded social and community housing from scope. Within that, it is looking at the framework, settings and administration of any scheme, available state land and potential pilot sites, measures to promote the construction of dwellings on scheme land, the potential for private sector participation, and the potential role of Keystart as a financing partner.
That fourth item is the one with direct construction relevance. A land rent scheme does not build anything by itself. Someone still has to get houses onto the blocks, and the committee has been asked to work out how that would happen.
The financing problem sits with the house
The most consequential evidence for builders came from the financing side, at the hearing held on 8 June 2026.
Keystart chief executive Mark Tomasz raised the security question directly. Under a shared equity arrangement, a lender has both land and a house behind the loan. Under a land rent arrangement, the security is the built form alone, which he described as a depreciating asset. He told the committee this raises a question about risk appetite for that security, and about the eventual impact of write offs. Keystart, he said, is open to financing it, but the point needed flagging.
Keystart executive manager of commercial property finance Paige Fletcher told the committee that land lease arrangements already operate in Perth and are funded by senior financiers, so the model works in that form. Applying it to a land rent scheme would require considerable land parcels and, most likely, a private developer delivering the built form at scale.
Fletcher noted that existing WA land lease communities are generally over 55s communities of around 150 homes or more, that the major banks already provide development finance in that space, and that most of that debt is repaid through the sale of the dwellings.
The distinction matters. Financing a 150 home community on leased land is a solved problem in Perth. Financing an individual household to build a single house on a government lease is not.
Where the WA Government sits
Deputy Chair Lachlan Hunter asked Treasury and the Department of Housing and Works whether government had asked them to do any investigational work on a land rent scheme as part of overall housing policy. Deputy Under Treasurer Michael Andrews said it had not.
Keystart also reported no demand signal. Tomasz told the committee that no customers were approaching it asking for a land rent option, and that he expected most would prefer shared equity because it lets the household share in land appreciation and gives them a reason to transition out. Keystart administers the state build to rent kickstart fund and sits behind expanding shared equity programs in regional Western Australia, so its view on where public capital does the most work carries weight in this debate.
Treasury also pointed to the practical constraint. There is not a large amount of state land readily available, and the real up front cost is the enabling infrastructure needed to get land into a condition where houses can be built on it. Asked whether government works to a per lot infrastructure figure, Treasury said there was no hard and fast number because it varies by location.
What WA already does that looks like this
Ground leases are not new to the state.
Evidence to the committee described a project in North Fremantle delivered on former Public Transport Authority land, where a ground lease was provided, the state grant funded construction of the dwellings, and a community housing provider was required for property and tenancy management.
A second example, the former Stirling Towers site on Smith Street in Highgate, is under construction as a build to rent project in which the state retained ownership of the land. The proponent hands the site back to the state with the dwellings refurbished to an agreed standard at the end of the term, given in evidence as 50 years.
Both show a state that is comfortable holding land under lease while someone else delivers the building. Neither is a land rent scheme for individual home buyers.
What changes for residential builders
If a scheme of this kind proceeds, three things move.
The buyer changes. A land rent cohort is defined by an income ceiling and an annual eligibility test rather than by borrowing capacity against land. That is a different client profile, with a different budget shape and a different exposure to variations during the build.
The security position changes. Where a lender holds the dwelling alone as security, the construction contract and the valuation attached to it carry more of the risk than they do on a conventional house and land purchase. That is the question the committee has heard flagged most consistently, and it has not been resolved.
The supply question does not move on its own. Land rent lowers the entry cost for a household. It does not create serviced lots. On the evidence given to this inquiry, enabling infrastructure remains the binding constraint on WA land supply, which is the same constraint sitting behind recent state land releases across the Perth metropolitan area. A change in tenure does not touch it.
What happens next
The committee tables its report on 19 November 2026. A government response would follow after that.
Until then, the position is straightforward. Western Australia has a parliamentary inquiry, a substantial body of submissions from government agencies and industry, and no policy.
THE GOOD BUILDER TAKE
Land rent is a tenure idea rather than a supply idea. It changes who can afford to enter the market. It does not change how many serviced blocks exist.
That does not make it worthless. Taking the land cost out of a household borrowing requirement is a real lever for people sitting above social housing eligibility and below market entry, and the ACT has run the model long enough to show it can operate.
What stands out in the evidence so far is how measured the response has been from the two places that would have to make it work. Treasury has not been asked to model it. Keystart is open to it, but flagged the security problem and reported no customer demand.
For builders, the question worth watching is not whether the committee likes the idea. It is whether anyone solves construction finance where the only security is a depreciating single dwelling. Answer that and the scheme is buildable. Leave it unanswered and the report will be interesting reading that produces no starts.
Frequently asked questions
A land rent scheme is a housing model where a household leases the land from government and owns the dwelling built on it. Instead of buying the land, the household pays an ongoing land rent charge, usually calculated as a percentage of the unimproved value of the block. Removing the land cost from the purchase lowers the amount the household needs to borrow, because it finances only the dwelling and the associated transaction costs.
No. As at August 2026, Western Australia has no land rent scheme and the government has made no commitment to introduce one. The Legislative Assembly Public Accounts Committee is running an inquiry into whether such a scheme would be feasible, which commenced on 25 February 2026. At the hearing held on 8 June 2026, Treasury told the committee that government had not asked it to undertake investigational work on a land rent scheme as part of housing policy.
Lessees rent land from the ACT Government and pay an annual land rent charge calculated on the unimproved value of the block. Since 1 October 2013, new entrants must qualify for the discounted rate of 2 per cent of unimproved value, and the standard 4 per cent rate is closed to them. Eligibility is reviewed annually against an income threshold, which is $170,000 in total gross household income from 1 July 2023, rising by $3,330 for each dependent child up to five. Annual rent increases are capped by wages growth. A lessee can convert to a nominal Crown lease at any time, priced on the unimproved value at the date of conversion.
It depends on the scheme design and on lender appetite. Lending on ACT land rent blocks is available from some lenders. The issue raised repeatedly in the WA inquiry is that under a land rent model the lender security is the dwelling alone rather than land and dwelling, and a dwelling is generally a depreciating asset. Keystart told the committee on 8 June 2026 that it is open to financing a land rent product but that risk appetite for that security, and the consequences for write offs, are important considerations.
The Public Accounts Committee is due to table its report on 19 November 2026. Submissions closed on 8 May 2026 and 93 have been published. Hearings were held in June and August 2026. A government response would be expected after the report is tabled.
This article is general information only. It reflects the status of the Western Australian parliamentary inquiry into land rent schemes as at 13 August 2026 and does not constitute legal, financial or professional guidance. Scheme settings referenced for the Australian Capital Territory are current as published by the ACT Revenue Office and are subject to change. Anyone considering a decision affected by these matters should obtain independent professional guidance relevant to their own circumstances.
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