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Punitive rates proposed for owners of vacant land

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A proposed review of the Adelaide City Council’s rates structure could see owners of long-vacant land punished with higher rates, InDaily can reveal.

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Owners of vacant land, including the controversial former Le Cornu site in North Adelaide, could be charged higher council rates as a result of a comprehensive review of council revenue-raising proposed by North Ward councillor Phil Martin.

Martin told InDaily the council should consider charging higher rates for vacant, undeveloped land and lower rates for heritage properties – both aimed at encouraging property owners to develop their assets – as part of the review.

“If the council has a policy that’s aiming to stimulate economic growth and there are investors who want to sit on vacant land, they … hinder that strategy,” said Martin.

“If it is council’s wish that vacant land is developed … a higher rate could be charged until development commences.

“It ought to be up to that council to apply … financial incentives to get that development moving.”

He said the council charges two sets of rates: one for residential properties, and another for commercial properties, but that could change to make rates “more equitable”.

He said there was evidence that some city council ratepayers were paying higher rates for similarly-valued land in nearby inner-city council areas, and that the entire revenue base – including that from the council’s U-Parks – should come under review.

“We already have two different rate structures in the city,” he said

“[But] there are a range of levers for council to use rating policy to achieve other policy outcomes.”

Martin acknowledged that land owners suffering financial problems would not be encouraged to develop their land because of higher rates – so the council would have to develop a nuanced approach to take financial hardship into account.

He said any change to the rates system would have to be efficient, simple and equitable.

Long-time city councillor Anne Moran told InDaily the council had received advice from the Crown Solicitor’s office during the tenure of then-Lord Mayor Jane Lomax-Smith that it was not possible for vacant land to be charged higher rates under the Local Government Act.

However, “if we had known we could have done it, we would have done it years ago” and “if we can do it [in this council term] we’re doing it.”

But she cautioned that it would not be helpful to charge higher rates on the old Le Cornu site this year, because for the first time in a long time, development on the site “looks like going ahead”.

She said if any higher rates were to be charged on vacant land it would have to wait until next year.

The council’s executive manager of business and finance Mark Gray told InDaily it was, in fact, possible under the Local Government Act to charge different rates for vacant properties – as occurs in other councils around South Australia, such as Prospect.

The Act says that councils can charge differential rates for nine categories of land use, which includes ‘residential’, ‘commercial’ and ‘vacant land’.

But he said there was no room in the current legislation to charge different rates for heritage or non-heritage listed properties.

He said that, if the council so chose, it could instead give “discretionary rates rebates” to encourage owners of heritage properties to maintain and restore them.

Gray said that if the council agrees to Martin’s request to develop costings and a methodology for the review when it is considered at a council meeting next week, the review would run between July and December this year and involve “extensive consultation” with all affected ratepayers.

Detailed Makris Group plans for the Le Cornu site were made public early last year after months of negotiation between developers and the state’s planning authorities.

A spokesperson for the Makris Group told InDaily this afternoon that a project management firm had been engaged to work on the development.

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