Rating of land – what happens when there is no applicable rating category

In brief – The categorisation of land for rating purposes has major financial impacts for landowners and local governments. In a recent appeal about the categorisation of land for rating purposes, the Land Court had to deal with a situation where it found that neither of the rating categorises submitted by the owner or Council were correct.

Implications

• An owner of rateable land has a right to object to the local government against the rating category applied to the land.
• If an owner is not satisfied with the decision on the objection, the owner may appeal the decision in the Land Court.
• The Court’s function is confined to deciding the correct rating category for the property and the Court has no power to create new rating categories.
• In determining an appeal, the Court is bound by the rating categories adopted by the local government but local governments should take care in drafting rating categories and avoid ambiguities or conflicts in categories.

Decision

The owners of a parcel of land in the Moreton Bay Regional Council area filed an appeal in the Land Court against the rating categorisation of their land. The land in question contained a detached house and a separate granny flat.

The Council had categorised the land as being “F2” which was defined as multi residential where the number of flats on the physical land parcel is equal to 2. The owners asserted that the land should have been categorised as “R1” being “land which contains a single residential dwelling, not part of a community titles scheme, and used by the property owner or at least one of the property owners as their principal place of residence.”

The Court held that on the facts the subject land contained two separate, distinct and unconnected residential dwellings. At the hearing, the owners conceded category R1 did not fit the circumstances of their property. However, they argued there was no appropriate category for their situation, which they described as “assisted/dependant living accommodation”.

The Council submitted that the land should be categorised as F2. However, the Court found the descriptions and definitions for Category F were unhelpful. In the Court’s view, there was ambiguity and conflict between the description used for each category in this group and the definition of “flat” which applied to the F category.

Ultimately, the Court held that the land did not comprise 2 flats as defined under the rating categories and accordingly that the category F2 was wrongly applied. However, the category submitted by the owners was also not relevant.

The Court noted that it must make its decision in accordance with the existing rating categories and that the Court only has jurisdiction to change the rating category, not to create new rating categories for local governments.

In this instance, the Court held that there was another category that neither party referred to which applied in the absence of any other appropriate category. As neither R1 nor F2 was appropriate, the Court held that the land should be assessed as a category “O1” property. That is “land not contained in any other differential rating category and the rateable value of the land is less than $1,000,000”.

On this basis, the Court allowed the appeal and ordered that the proper rating category of the subject land was O1.

The Court then went on to note that it had no power to create new rating categories. Rather, its task was to assess whether the rating category into which any particular land was placed was the appropriate one, having regard to the definitions and provisions in the Revenue Statement.

Further, the history of the land and rating categorisations in previous rating periods were largely irrelevant unless there were good reasons to have regard to them.

Accordingly, the assessment in a rating categorisation appeal was reasonably confined. The Court had no authority to go behind, or investigate machinations prior to, the making of a rating resolution by the Council. That would be a matter for judicial review in the Supreme Court of Queensland.

The Court gave consideration to the relevant rating categories criteria and definitions in the Council’s Revenue Statement and planning scheme. It was also assisted by the assessment carried out by a qualified surveyor in relation to the properties within the Viridian Noosa complex.