When does the category for the rating of land change?

The recent Land and Environment Court case of Karimbla Properties v Council of the City of Sydney has found that land can be recategorised for rating purposes once a developer undertakes activities which implement a development consent for the new use.Karimbla Properties owned various parcels of land in NSW. At the time, the various sites were categorised as “business” for rating purposes.

Karimbla Properties decided to develop their land and erect residential buildings. They later applied to the relevant local government authority to change the rating category from “business” to “residential accommodation”, effective from a certain date. The various councils either refused or failed to determine each application.

The main issue of the case was the proper construction of section 516(1)(a) of the Local Government Act 1993 (NSW) and the use of the phrase “dominant use… for residential accommodation”.

Karimbla argued that the various sites were approved for residential flat building projects, and preparatory works were underway. The “use” of a site may include circumstances where the activity on the land is understood as preliminary to a future use on the site. The purpose of the activities on the land must be considered in order to properly evaluate the use.

The court concluded that even though the sites may have been in the process of development for its eventual use, there must be a present use for which the land is used and that can be ascertained by reference to the current activities on the site.

The court’s findings were consistent with the 2003 decision of Meriton Apartments Pty Limited v Parramatta City Council. This case also held that the purpose for the use of land can be manifested by the commencement of the construction of a residential building.

When a Council is determining the category for the rating of land, a key consideration should be the purpose of the current activities on the land. Developers should also note that they can make an applications to Council to change the category for rating purposes at the time when they begin preparatory works on their new development.

If you would like legal assistance, you can contact Alyce Kliese directly by clicking here.

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Alyce is a civil engineer and a practicing lawyer, who has a desire to share her insights on the legal and practical realities of the development industry.