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Posted on: 1 March, 2019

Mayor Ludwig explains decisions behind Non-Owner Occupied Residential rating category

Last week a number of Councillors led by Cr Mather announced they had signed a document indicating they wanted to shortcut the budget process to remove Non-Owner Occupier Residential (NOOR) rating category from the 2019 – 20 budget.

The fundamental principle here is decisions should not be based simply on the personal preferences of individual Councillors, but be made after all factors are known and fully taken into account for the greater good for all ratepayers.

Given we are only at the start of the budget process, full consideration has not yet taken place.

Councils have an obligation to all ratepayers to responsibly put personal preferences aside and use every tool at their disposal to appropriately manage where and how rating revenue is generated.

From a personal perspective I was originally not in favour of introducing Non-Owner Occupied Residential categories until 18 months ago when it was recommended to Council by one of Queensland’s foremost rating specialists as a measure that should be considered in delivering a fairer rating system.

The underlying principle of why close to one third of Queensland Councils have adopted these rating categories is that investment properties are a recognised commercial business activity and a wealth generating land use.

Investment properties generate both recurring rental income and capital gains wealth while affording their owners a broad range of tax benefits including the ability to claim tax deductions of their entire rates bill.

Put simply, the additional revenue from investment properties assists Council in lowering rate rises for ordinary ratepayers who do not enjoy the benefits of income or tax write-offs afforded to investment owners by other tiers of Government.

Last year this new category was introduced at just 2.1% above ordinary owner occupied properties, compared with Rockhampton Council’s 15%. This equated to only 48 to 58 cents extra a week for investment properties before taking into account any tax concessions those owners may receive.

On the matter of second homes that are being used solely for family purposes and not income earning, for fairness Council is already looking to address these anomalies.

This week Councillors received formal advice that the proposed action of trying to direct the removal of this important rating Category prior to formal adoption of the Budget in July and full consideration of the impacts was contrary to both legislation and recognised responsible budget procedures.

If in July a majority of councillors still wish to remove the Non-Owner Occupied Residential rating category, after full consideration of the long-term impacts and addressing any financial shortfall by either raising rates in another area or cutting recurrent expenditure, then that is what will happen when the budget is voted on and democratically adopted.

Known list of Councils with these rating categories include:
Brisbane City Council
Central Highlands Regional Council
Fraser Coast Regional Council
Gold Coast City Council
Ipswich City Council
Livingstone Shire Council
Lockyer Valley Regional Council
Mackay Regional Council
Mareeba Shire Council
Mount Isa City Council
Moreton Bay Regional Council
Noosa Shire Council
Paroo Shire Council
Rockhampton Regional Council
Scenic Rim Regional Council
Somerset Regional Council
Sunshine Coast Regional Council
Tablelands Regional Council
Torres Shire Council
Townsville City Council
Whitsunday Regional Council

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