Pialligo residents were scrambling on Wednesday to understand the impact of a 35 per cent rise in their rates in this week’s budget, with an average increase of $920 for the enclave of orchardists, nursery owners and lifestyle blocks near the airport.
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The government said the hike in rates in Pialligo, well above the average 10 per cent across the city, was a result of higher property values following recent sales.
It’s a hip-pocket blow that Pialligo fruit grower Jonathan Banks saw coming. Mr Banks said recent multimillion-dollar sales of a couple of big parcels of Pialligo land suggested the rate hikes were inevitable.
Apple orchardist Ken Kerrison said the basis of valuations was “pretty thin”, and with only 20 properties in the suburb,it was likely that one or two big sales had been “misinterpreted by the valuers”.
"One problem we face here is that there are only about 20 properties in the suburb and there are few sales," said Mr Kerrison. "So the basis of the valuations is pretty thin and there are probably more sales of properties with the sort of intangible component identified by the AAT [Administrative Appeals Tribunal] than straight rural residential ones."
The Kerrison family has been in Pialligo for about 40 years, and it was not the first time they had been hit with big rates increases, he said.
In the 1990s, the community challenged government valuations in the AAT and won, he said. The valuers had taken the sale of properties and deducted only physical improvements, not taking into account the fact that higher prices were paid because of “intangible improvements”, such as the farms and businesses on the land. The tribunal effectively ruled that the intangible improvements were not part of the unimproved land value, he said.
“That successful effort cost the Pialligo community $50k and I have no doubt that, if the proposed rates increases are attributable to similar bad valuations then we will sort them out again,” Mr Kerrison said.
Pialligo Residents Association president Bob Ross, who contacted fellow residents on Wednesday, said most were used to big increases in rates because of rising land values. But he pointed out that one or two high-priced sales could be enough to bring a change in valuations across the board because there were so few blocks.
“What is a bit irritating to people, though, is that we get virtually no services from the government,” he said. “A few people have said to me that this is the most expensive garbage collection that you see in Australia.”
The area had no bus services, other than a school bus, and little in the way of road works, with the roads in poor condition from use by trucks, he said.
Treasurer Andrew Barr said there were only six residential properties in Pialligo, with an average 35 per cent increase in rates. The average residential unimproved value for Pialligo was $580,267 in 2013 and $713,867 this year.
“All rateable properties in Pialligo have required a significant adjustment to their unimproved land value in 2014 following a body of sales which have validated the high prices paid for properties in that particular precinct,” he said.