Queensland government entrenches higher council rates for property investors

The besieged Queensland government has moved to retrospectively legalise the state's "differential council rates" system which was recently found by the Supreme Court to be illegal.

The anti-investor legislation covers the 20 Queensland Councils that charge higher rates for investor ratepayers. Property Observer reported the pending challenge last October.

The Local Government Minister David Crisafulli introduced amendments to prevent ratepayers from having the money returned to them, and to allow councils to continue using the differential rates system after letters from the Local Government Association and Brisbane City Council.

Up to $300 million in higher rates are collected annually from “non-owner occupied homes” across Queensland by councils

Crisafulli said it was not up to him as local government minister to decide if it was "good policy for councils" to use a differential residential rating system.

But the amendments cleared up "any doubt about whether councils are able to issue differential rates for owner occupied versus investors".

Twenty of Queensland's largest councils including Brisbane, Gold Coast, Townsville, and Moreton Bay Regional Council use differential rates policy for residential homes and units.

Brisbane City Council introduced the policy under former lord mayor Jim Soorley in 1992 and Mackay Regional Council was the last of 20 councils to introduce it for 2012-13.

The Local Government Association - on behalf of other councils - is challenging the Supreme Court's ruling that Mackay was wrong to introduce the scheme, however Queensland councils need to bring down budgets within the next month.

It has emerged there is throughout Queensland councils a little-known residential rates category that sees people who own a property - but do not live in it -  being hit with a larger rates bill than people who live in the home they own.

Some councils call it an "investor" residential rates category, others called it the "non-owner occupier" rates category.

The Supreme Court ruled last month that Mackay Regional Council's decision to apply the "differential rates" system was illegal. Mackay investment home owners were being charged an extra $200 a year above the normal rates.

The ratepayers, who call themselves the Mackay Investor Rates Committee, welcomed Supreme Court judge Justice Duncan McMeekin who ruled it was illegal for Mackay to charge a different rate.

Mackay Regional Council faces a refund bill of $1.6 million on 7,700 properties for 2013-14.