Follow this site by email:

Queensland developers exploit beastly loophole to dodge land tax

CourierMail.com.au

DEVELOPERS have been accused of using a couple of cattle to save hundreds of thousands of dollars in rates and land tax.

It has led to a major beef over a loophole in the Valuation of Land Act which allows developers to have their land valuations slashed if they can prove they are earning as little as $96 a week from a rural pursuit, such as agisting stock.

Moreton Bay Regional Council deputy mayor Greg Chippendale said his council lost almost $400,000 in rates revenue after two blocks of land were valued down from $21 million to $1.15 million and from $29 million to $1.1 million using the loophole, which was designed to protect farmers. Both blocks had been bought for development and received development approval.

"It certainly puts a hole in our budget," Cr Chippendale said.

Ipswich Councillor Paul Tully accused developers of "rorting" the system. He said there was no way a property owner would pay $21 million for a block of land to make less than $100 a week from it.

"The Government needs to amend this urgently because it is basically a fraud, not just on the state, but on local government. It means the appropriate land tax is not being paid, the appropriate rates are not being paid. It's just a complete rort."

Developers, however, say it is not as sinister as it sounds."

UDIA Queensland Moreton Bay branch president Paul Stapleton said some blocks of land could take more than five years to develop and companies tried to make some income from the land in the meantime.

"Because there is such a low availability of land, sometimes developers are caught in the situation of having to commit to land as opposed to simply putting their foot on it," he said.

"Land that is subject to going through a DA process can take a long, long time, so I would imagine if it was in a rural environment you would do everything you could to at least keep some income flowing to help meet some of your holding costs."

Mr Stapleton said he was not aware of any developers using rural enterprise as a way to cut down their rates bill.

Councillors at the Urban Local Government Association of Queensland conference in Mackay last week voted to lobby the State Government to close the loophole.

The Local Government Association of Queensland is expected to take the fight to the state on behalf of the ULGA. It is working with the state to review the Act. The relevant section is expected to be one of the first targeted.