President of the Local Government Association of Queensland (LGAQ), Councillor Paul Bell, said a failure by the Queensland Government to efficiently administer its land valuation system will cost five Councils $15 million in rate refunds.
“It’s a significant loss to Councils, which the State should cover,” he said.
In 2003, the Queensland Government determined valuation increases for 30 large shopping centres, which resulted in a number of appeals. Last October, the State’s Land Appeal Court threw out the increases, finding that the method used to calculate the valuations was too difficult. As a result, the five Councils involved – Brisbane, Gold Coast, Logan, Townsville and Toowoomba – will have to refund rates to the property owners who lodged appeals.
Councillor Bell said Councils are required to use the State valuations, which is a service Local Governments pay $12 million a year for.
“On top of this payment, five Councils now have to find an estimated $15 million because of a State Government administrative error,” he said. “We recognise the State is attempting to rectify the situation by revaluing the properties, but these Councils will still be significantly out of pocket. We are concerned there might be more similar occurrences to come.
“The State’s offer to change the valuation system is a case of too little, too late. There have been five reviews of the land valuation system over the past 20 years, each of which found it was flawed and recommended changes. LGAQ had supported the proposed changes and had called on the Government to act.
“The last review three years ago recommended site valuation replace the outdated unimproved capital value method, but this was rejected by the then Beattie Government. I call on the Government to compensate these Councils for the rate refunds they will now have to pay.”
Natural Resource Minister, Craig Wallace, said amending the Valuation of Land Act 1944 as early as possible this year will be a priority for the Government. He said the amendments to the Act would remove the assessment of intangible improvements from the valuation process.
“This will clarify the definition of unimproved value and introduce a new formula for the valuation of large regional shopping centres,” the Minister said. “It will provide certainty for owners and Councils, which levy rates using unimproved land valuations for such sites under the Act.”
Minister Wallace said the State Government will hold talks with key stakeholders such as the Shopping Centre Council of Australia, the Property Council of Australia, LGAQ and individual Councils to ensure there was a clear understanding of the Government’s future course of action to address the matter.
