At least $240 million worth of new residential and commercial buildings are being delayed because of fees or regulations disputes with the ACT government, according to a peak industry group.
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A survey has found delays affecting 54 builders. Eight projects are worth more than $20 million, and another eight are worth between $11 million and $20 million.
The ACT Master Builders Association survey found builders wanting to leave the ACT to escape complex regulations, steep commence and complete fees and lease variation charges which are unique to the territory's leasehold system.
Deputy executive director Jerry Howard gave an example of a small business which started with the help of a government loan in 2000, and paying $350,000 for a site for their new venture, which now employs 12 people.
Development approval and architectural fees cost $250,000. Their annual rates were $30,000.
But they cannot afford to go ahead with the building because they have a late fee of $500,000 after not completing their project within the lease's time frame.
''They were like many other small businesses, renting a place and wanting to build and rent half their space,'' Mr Howard said. ''The land is now worth less than what they paid for it.''
Commence and complete fees are aimed at discouraging builders from land banking, and forcing them to build within a specified time.
This does not trouble builders in buoyant times, as they either have tenants to fund new buildings, or can speculate on a building and quickly sign a tenant.
But residential and commercial property markets have slowed in Canberra, and the outlook is for more subdued activity while the federal government continues cutting jobs and looks for more savings.
A builder told The Canberra Times he thought he had a tenant for a block of land he bought for $2 million.
But the tenant pulled out, and about a year later neighbouring blocks of land sold for a reduced price, undermining his project.
He was able to negotiate a reduced extension-of-time fee, but was still struggling.
''The commercial market has been a very difficult market anyway,'' the builder said.
''There's been a lot of consolidation, people are negotiating their rents down, because there's vacancies, people have hit the wall and are trying to fill a lot of other spaces.
''You are railroaded into these difficult positions. Speculating with commercial (buildings) is so dicey. You could build something for a showroom and someone comes in and wants a panel beating shop and it is a totally different building.''
Mr Howard said small, family-owned businesses were telling him they would have nothing to work on next year because they could not afford fees and charges.
Survey respondents said people investing in their new building projects were redirecting their money to Melbourne or Sydney, where they did not have to factor in lease charges.
In a written response to questions from The Canberra Times, when the MBA raised the issue last week, Economic Development Minister Andrew Barr said the government had provided a two-year moratorium on extension-of-time fees for commercial and industrial leases from July 1, 2009 to June 30, 2011 in response to the global financial crisis.