‘Attack on Common Sense’: Dairy Road Housing Project in Jeopardy
A major housing development in Canberra faces cancellation if the ACT government succeeds in appealing a reduced tax bill, the project's developer has warned. The Molonglo Group says reinstating the original $101.5 million lease variation charge would economically terminate the planned 408-home precinct at Dairy Road before construction can even begin.
Tribunal Slashes Tax Bill, But Government Appeals
The ACT Civil and Administrative Tribunal recently ordered Molonglo Group to pay a significantly reduced $26.5 million lease variation charge for its 14-hectare site, a dramatic cut from the $101.5 million initially issued by the Commissioner for ACT Revenue. The tribunal rejected the government's valuation method, which relied on hypothetical improvements and 'not economically feasible' assumptions about the land's highest potential value.
Nikos Kalogeropoulos, co-director of Molonglo Group, stated the project cannot proceed under the original tax demand. "We cannot deliver the next stage of Dairy Road with an LVC of $101 million. It doesn't work," Mr Kalogeropoulos said. "If successful, it will economically terminate Dairy Road before one new home can be built. The ACT government will win 100 per cent of nothing."
Broader Implications for Canberra's Housing and Business
The approved development, designed by internationally renowned David Chipperfield Architects, is already obligated to contribute $38.5 million for public infrastructure, including a new road and Monaro Highway upgrades. The dispute highlights the ongoing tension between capturing land value uplift for public benefit and enabling housing construction during a national housing crisis.
Local businesses within the precinct are also feeling the impact. Laurence Kain, co-founder of Capital Brewing Co, said the delays have already cost the company financially and threaten its future growth plans. The Property Council's Ashlee Berry called for a review of the lease variation charge system, emphasising the need for "certainty, transparency, and consistency" to support housing delivery.
This conflict emerges even as Chief Minister Andrew Barr signalled potential flexibility with LVCs to encourage housing, provided the community receives a benefit. The government's decision to appeal the tribunal's ruling now places the future of a significant urban renewal project in the balance.
