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Local Government (Differential Rates on Vacant Land) Amendment Bill

Introduction and First Reading

The Hon. J.A. DARLEY (16:08): Obtained leave and introduced a bill for an act to amend the Local Government Act 1999. Read a first time.

Second Reading

The Hon. J.A. DARLEY (16:09): I move:

That this bill be now read a second time.

Many councils charge a higher differential rate for vacant residential land as an incentive to build on the land. Sometimes this rate can be double the regular residential rate. The theory behind this is that if the rates are higher it will encourage people to build on the property rather than leave it vacant. However, there is concern that this actually provides a disincentive or penalty for people, especially young people, from purchasing land.

The ABS has previously reported that for every $1 million spent in construction, a possible $2.9 million of output would be generated in the economy, including 37 jobs as a whole. Stimulating the economy through construction is positive; however, if people are being penalised with high rates while they are saving to pay for the construction of their property the differential rate may act as a disincentive but certainly as a penalty.

My bill will stipulate that councils who charge a differential rate will only be able to do so after the first three years the land has been within ownership. After this, councils will be able to charge a higher differential rate. If the property changes ownership the three-year grace period starts again for the new owner. There are some who may try to exploit this grace period by changing ownership after three years. However, the costs associated with changing ownership through the Lands Titles Office would be disincentive enough. Currently the cost to do this for a property worth $300,000 is $14,000 or $6,000 for a piece of land which is worth $150,000.

I understand that this amendment is unlikely to gain the support of councils; however, I believe it is necessary to help those who are already struggling with the cost of living and the additional cost of vacant residential land and building a new home. I commend the bill to members.

Debate adjourned on motion of Hon. T.J. Stephens.