Latrobe City push to penalise ‘land-banking’

HEFTY council rates and stricter property standards could be enforced as part of Latrobe City’s investigation into enforcing owners to clean up unsightly properties.

As of next year, council will investigate a similar controversial differential rating system, similar to Baw Baw Shire’s, which aims to penalise landowners “land-banking”.

Land-banking refers to property owners purchasing land with the intent to hold until the market increases to sell for a profit.

“I would certainly want to look at a positive rates differential in terms of increasing (rates) for properties that have been long-term derelict,” Latrobe City Mayor Ed Vermeulen said.

“We are going to do something about this problem,” Cr Vermeulen said.

“We are extremely concerned about unsightly properties, they are terrible to look at, but being terrible to look at is currently not a reason for local government to take action.”

Despite not mentioning which commercial property owners were classified as “land-banking” in the region, Cr Vermeulen said this was a problem council would pursue.

Last year, Baw Baw Shire initiated a differential rate system for commercial and industrial properties for buildings on the land which were determined as not adding any value to the property, and as a result had a hefty rate of 0.9842 cents in the dollar.

There were 28 properties included in the Baw Baw Shire’s Commercial and Industrial B category with a total capital improved value of $7.6 million and estimated rates to be raised in this category was $75,015.

Cr Vermeulen said he believed the neighbouring shire’s approach to land-banking may be an option council considered to address the unsightly property issue throughout the region.

“We need to explore the options that deter property owners who are neglecting their (land) and sitting on them for an increased value, to the detriment of the general public,” Cr Vermeulen said.

Municipal Association of Victoria president Bill McArthur said, after receiving a letter from the mayor advocating for the establishment of effective enforcement options for unsightly property owners, that they had identified gaps in the current legislation.

Cr McArthur said the MAV was going to raise council’s concerns with the relevant state departments.