ACT Government : Concessional Loan Scheme for Combustible Cladding

The OCN (ACT) has long urged the ACT Government to create a concessional loan scheme to assist with the cost of removable of combustible cladding that was originally approved to be installed.  Many owners corporations have acted at their own cost; they could wait no longer. 

The OCN (ACT) has been concerned that:

·      Many strata development have had no choice but to obtain loans at full market rates to undertake remediation to contain insurance premiums and meet their obligations to owners and residents

·      Other jurisdictions (NSW and Victoria) moved to assist owners and development over a year ago

·      Unlike NSW, the ACT Government scheme includes interest on the loan

·      Development fees will be applied to works undertaken

·      The full extent of the problem in the ACT will be difficult to determine because safety assessments are reliant on self-reporting

On 6 April 2022, ABC Canberra reported that “The ACT government this week announced a $50 million concessional loans scheme for Owners Corporations to remove combustible cladding” 

In reality, the loan scheme may not be available until mid-2022.  For article click here.

On 13 April 2022, the Minister for Sustainable Development, Rebecca Vassarotti, advised OCN:

  • The ACT Government is progressing the delivery of a concessional loan scheme to support eligible buildings owners replace combustible cladding on their buildings and looks forward to opening the scheme in the middle of this year.

  • The procurement process is now underway with a tender released to secure a loan provider who will financially assess eligible owners’ corporations and provide standard day to day loan administration and repayment processes that are usual with a strata loan.

  • Key framework of the concessional loan includes:

    • $50 million has been initially allocated to the scheme.

    • Fixed interest rate at the Government cost of borrowing, which is currently in the band of 2.5 per cent to 3 per cent.

    • Generally loan terms of up to 10 years.

    • No application or other loan fees.

    • Individual loans generally up to $15 million per owners’ corporation.

    • No penalties for repaying the loan early.