This report presents a new economic model for Community Land Trusts (CLTs) in Australia that strengthens their business case through advanced land and housing taxation methods. It shows how value-based ground leases, indexed resale formulas and targeted public investment can reduce home costs by 39%, halve mortgage requirements and deliver perpetual affordability. 

In a CLT, the resident purchases just the house, maintaining their private property rights over the building. The Trust owns the land in perpetuity, with the understanding that housing locations remain affordable over time. Of the various shared equity models available, CLTs are a form of housing provision that is perpetually non-inflationary. 

The report demonstrates how successive iterations of demand side incentives (Help to Buy, Victorian Homebuyer Fund) have actually inflated the market – acting as a public subsidy for developers. The report focuses on the regional Victorian city of Castlemaine. The international precedent is that CLTs typically start in regional areas, then move towards higher densities over time.

Key findings

• A 60% lower deposit reduces the barrier to entry into housing.
• CLTs can reduce housing costs by up to 39% compared to market purchases over time.
• Residents of CLTs save approximately $153,000 in housing costs over a 12-year tenancy.
• Each decade, residents furnish the seed funding for a new CLT.
• Government investment in Help to Buy and First Home Buyer Grants could be better directed towards CLTs, delivering a 450% return on investment when considering supply outcomes to costs. 

Key recommendations

• Legislative support: introduce regulatory frameworks to recognise CLTs as a key affordable housing mechanism.
• Public-Private Partnerships: encourage superannuation funds and impact investors to participate in CLT financing, diversifying risk while ensuring social returns.
• Targeted land policies: allocate surplus government land to CLT developments, ensuring sustainable and affordable housing supply.
• Scalability: establish pilot CLT programs in high-demand regions and expand based on demonstrated success.