April 29, 2014
Developers who have plans to bring blocks in the region’s smaller towns on to the market should act quickly.
At present, the cost of connecting a new block to existing infrastructure in Murgon, Wondai, Nanango and Blackbutt is between $2308 and $8268 cheaper than Kingaroy.
But this price advantage will gradually disappear over the next five years as the South Burnett Regional Council moves to standardise fees across the region.
The move will also put an end to ratepayer subsidies for real estate developers and help improve Council’s bottom line.
Infrastructure charges are the contribution a developer makes to connect a block to the town’s water supply and sewerage systems, along with a small amount towards parks.
They are a once-off charge only payable when a new development is undertaken, and are paid by the developer when the land is sub-divided,
Home owners do not pay this charge again when a house is built or when it is sold.
Acting Mayor Cr Keith Campbell said today a new “Price Path” to equalise the charges, which was introduced last November, is working smoothly.
“In the South Burnett, we currently charge $10,733 to connect an average town block in Kingaroy, while the charge for a similar block in Murgon is just $2465,” he said.
The differences date back to before council amalgamation.
Cr Campbell said some of the old councils had held the view that lower infrastructure charges would encourage development.
“In Murgon, for instance, the Council was charging $1925 per town lot for many years, and it almost sent them broke,” he said.
“Ratepayers were, in effect, subsidising every new block in the town.”
The South Burnett Regional Council voted last September to bring all the region’s infrastructure charges up to the same level as part of a new Regional Planning Scheme.
Council’s “Price Path” will see the cost of connecting new blocks across the South Burnett rise by between 12.55 per cent (Kingaroy) up to 392.81 per cent (Murgon) over the next five years.
The rise will also move the Council closer to full cost recovery on new developments, putting an end to developer subsidies in the region.
Cr Campbell said he didn’t expect any negative effects from the change because the region already enjoyed a significant price advantage over most of south-east Queensland where many Councils charged as much as $28,000 per block for infrastructure.
He said history had shown the strategy to subsidise developers to encourage new residents didn’t work.
“If you look back over the last six years, most of the new developments in the region have happened in Kingaroy, which has the highest infrastructure charges,” he said.
“This is because all developers do their sums and the price of developing a block is just one part of the many calculations they make.”
- Related article: Developers’ Fees To Rise
