Landowners seek rating certainty amid continued land valuation increases

Last week, more than 805,000 new valuations were issued to landowners across Queensland. These rateable properties account for 45 per cent of all rateable properties across the state and equate to a land area of 46 million hectares.

For the 24 local government areas (LGAs) impacted, the overall change was an increase of 19 percent effective from 30 June 2023. However, some areas were reportedly hit with incredible increases including 301 per cent for Mount Isa and 290 per cent for Cloncurry Shire.

Unimproved values underpin council rating determinations for rural land and are also used to calculate leasehold rents. The onus for ensuring valuations are correct sits with the landowner, not the local council, so it is important that if landholders disagree with their valuation, their objection is lodged with the Valuer-General by 16 May 2023.

Councils are bound by legislation to use the valuations to calculate the general rates, but they are ultimately in control of the process they follow to set their rates and can make decisions to ‘soften’ the rise by capping rates or adjusting the rate in the dollar.

The Guideline on Equity and Fairness in rating for Queensland Local Governments exists to provide a series of principles to assist local government to implement fair and equitable rating systems, however they are currently voluntary.

For farming enterprises, an increase in land value translates into an increase in the nominal capital value of the farm asset. In operational terms it adds to the cost base, diminishes liquidity and business profitability. Without a clear view of the future trajectory of rates, it is extremely hard for farmers to prepare and budget for the future.

In recent years, farmers in many regions have experienced significant cases of ‘bill shock’ where rate increases have not been predicted. In 2020, the Bundaberg region saw an average increase of 30 per cent across the entire rating category applying to farming areas, with some farmers seeing a rate increase of up to 235 per cent. Concerned landholders are now petitioning the state government for the equity and fairness guidelines to become mandatory.

As competition for land use grows and with land valuations on an upward trajectory, more farmers are being faced with uncertainty regarding future rate hikes. There are calls for councils to commit to limiting rate increases through rate capping and rating category changes when revaluation would otherwise result in disproportionately high rate increases on rural and agricultural enterprises. Whilst we are seeing some councils making an effort to work more closely with industry to address these issues, many landholders and industry leaders are also asking whether basing rates on the unimproved value is an appropriate model for the future.

Is it time that local government rating practices are reviewed so that these issues of uncertainty, transparency, consistency and equity can be addressed? QFF stands ready to assist government and key stakeholders in working together to achieve a better way forward to ensure a strong future not only for agriculture, but for regional communities more broadly.