Land Tenure System in Australia | Issues and Opportunities

Land Tenure System in Australia | Issues, Challenges and Opportunities

The land tenure System in Australia is the manner in which the Australian land administration party holds or occupies an area of land within its boundaries. It is a way of identifying who has the right to use and occupy land in accordance with the different types of ownership (Commission, 2019). There are commonly two types of land tenure systems in practice i.e. Freehold Land tenure system and the Non-Freehold or Leasehold land tenure system. The objective is to study the land tenure system in Australia with its current issues, challenges to solve those issues, and opportunities that can arise.

The present issues, challenges, and opportunities in the context of the land tenure system are studied. Issues like overlapping tenure system, increase in transaction cost due to varying tenure system across the states, etc. Multiple Tenures system such as Pastoral leases, Indigenous freeholds, and Native titles existing within the same land area are the main challenges. Australia is a country with a flexible and advanced land tenure system. Citizens’ land and property are secured, strong, and timely updated tenure.

Land Tenure System in Australia

Land Tenure System in Australia | Issues, Challenges and Opportunities
Land Tenure System in Australia

Land tenure is the name of the particular legal regime under which land is owned. It can be defined as the manner in which a party holds or occupies an area of land. The general principles of land ownership are detailed in ‘common law’ and have long been established in the Courts of Australia. It is important to note, however, that the extent of ownership has changed significantly in interpretation over the last century, with many details now incorporated into federal, State, and Territory legislation. (Commission, 2019)

Land tenure can also be referred to as the relationship between people and land. It is a way of identifying who has the right to use and occupy land in accordance with the different types of ownership. The office of Northern Australia has useful information about land tenure and the opportunities and challenges for investment in northern Australia. Australia’s systems of land tenure reflect the balance between both investor and community confidence across a range of important areas including:

  • the financial security in economic development and property markets
  • social stability through rights protection, housing, and employment
  • development planning and economic growth strategy
  • natural resource, environmental and cultural management, and sustainability

The land is generally referred to in two overarching categories:

  1. Freehold land (including forms of freehold land tenure that are held by traditional owner groups including Aboriginal and Torres Strait Islander land).
  2. Non-freehold land or Crown land which may either be leased on licensed.

Approaches Adopted

According to the Australian Trade and Investigations Commission, the general principles of land ownership are detailed in ‘common law’ and have long been established in the Courts of Australia (Australia, 2016). It is important to note, however, that the extent of ownership has changed significantly in interpretation over the last century, with many details now incorporated into federal, State, and Territory legislation. Australia’s systems of land tenure reflect the balance between both investor and community confidence across a range of important areas including financial security, social stability, development planning, natural resource, environmental and cultural management, and sustainability.

LTS in Australia-Issues, Challenges & Opportunities

1. Issues

  • There are multiple and often overlapping tenure types for the same land areas;
  • Administrative arrangements relating to land tenure vary across the State jurisdictional boundaries, potentially increasing transaction costs;
  • Within jurisdictions, issues of tenure and land use cut across a range of Departments;
  • There are distinct tenure reviews currently occurring within each jurisdiction, which means an already complex compliance environment is dynamic, increasing investor uncertainty;
  • Multiple interactions with the government are often required to build a picture of tenure that might be used to assess sovereign risk and implement tenure change; and
  • There are new and emergent tenures or changes to tenure (such as water, carbon, and biodiversity rights) for which tenure regimes are uncertain and are evolving. (Development, 2018)

The majority of land (75.4%) in northern Australia is Crown-owned, two-thirds of which is pastoral leasehold. Another 18.5% is indigenous land. Privately owned land accounts for 6.1%. The proportions of indigenous land and leasehold land are also significantly higher than in southern Australia. (Development, 2018)

2. Challenges Faced

Multiple Tenures: There is an enormous variety of tenures across the state. Unlike metropolitan areas, which tend to be largely freehold titles, in more remote locations there is far more diversity in the way in which land is held. In the broadest sense, there are three main categories of interest:

  1. Pastoral lease
  2. Indigenous freehold
  3. Native title

The terms and conditions of each type of tenure constrain the types of activities that can be carried out on the land. Usually, also, the terms and conditions limit in at least some respect, the extent to which land can be mortgaged or sold. Some land cannot be mortgaged, and some land needs government permission before it can be transferred. These restraints are quite different across tenures and jurisdictions. There is no single ‘property market’ in the way this might be understood. (Katgallow, 2015)

3. Opportunities

  • Freeholding leases: If tenures became freehold, the land could be sold without restriction. It is often assumed that banks would be more likely to lend against the freehold title – because, in mortgage default, the bank can sell the land to the highest bidder. (Katgallow, 2015)
  • Land Tenure System in Australia | Issues, Challenges and OpportunitiesRemoving ‘unnecessary’ conditions on leasehold: The original purpose of leasehold title was to open up western and northern frontiers through infrastructure development undertaken by the pastoralist. Historically, with a lack of planning regulation and a desire to improve economic infrastructure for primary industries, the pastoral lease was an important policy tool. The goal of ‘simplifying’ tenure is a clear indication of a shift towards a pure market mechanism to promote development. Freeing up conditions of land use is neither good nor bad in itself. The efficacy of the terms of land use will depend on the policy goals they serve. (Katgallow, 2015)
  • Improve the benefits to the nation from the optimal use and management of the north’s natural resources.
  • Support the transformation of Indigenous communities from welfare dependency to economic participation.
  • Sequester and manage vital ecosystem services such as water, biodiversity, and carbon while providing additional economic development opportunities.
  • Reduce contestation over land and resource use while improving the strategic use of land and resources for national benefit.

Conclusion

Australia is a country with a flexible and advanced land tenure system. The timely amendment and improvement of laws and acts have kept them moving with the changing time. Australia’s contribution to the capacity building of numerous land professionals and academicians belonging to various developing countries is appreciable. Citizens’ land and property are secured by this strong and timely updated tenure. And some leftover issues will also be soon resolved by the government. Click here to know more about the land tenure system in African nations like Ethiopia, Ghana, Nigeria, etc.

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