Last night the State Government passed the Sustainable Planning (Infrastructure Charges) and Other Legislation Amendment Bill 2014. As part of the amendments to that Bill, sections were added to the City of Brisbane Act 2010 and the Local Government Act 2009 to deal directly with the issues raised by the decision of the Queensland Supreme Court in Paton & Ors v Mackay Regional Council.[1]

That decision held that a local government was not entitled to impose differential rates on the basis of whether the land was the principal place of residence of the owner (that being a characteristic of the owner, not the land).

That decision had caused consternation among local government in Queensland, as many use that very distinction to impose differential rates.

While the decision is subject to a challenge that is to be heard in the High Court of Australia, the State Government’s amendments to the two local government acts now expressly authorise a local government to:

“categorise rateable land, and decide differential rates for rateable land, according to whether or not the land is the principal place of residence of the owner.”[2]

The amendments also declare that the local government:

“always has had... the power to categorise rateable land, and decide differential rates for the rateable land [in that way]”[3]

Implications

These amendments will provide some reassurance to Queensland local governments, which are currently in the process of preparing budgets for the upcoming financial year, that rates may continue to be set on a differential basis according to the owner’s principal place of residence. This will have a significant affect on Council’s expected rates revenue and budgets for the next financial year.

The legislative amendments appear to be confined to that narrow point, and while there will no doubt be some scope for debate around the term ‘principal place of residence’, the amendments do not otherwise disturb the principles of the Xstrata decision, which established that differential rates should be set on the basis of the characteristics of the land and not the characteristics of the owners.[4]