Impact of rezoning from R1 to R3 for Taveners Hill Precinct North
Note: This is our understanding of the impact of the changes, however, you should seek professional advice for your own circumstances
Zone R1 = one or 2 story houses/townhouses
Zone R3 = Allows 3 to 4 levels allowing medium density residential apartments (1/2/3 bedrooms)
If an area is rezoned, there is a financial impact in respect to an owners Council Rates.
There is a process to apply for rate exemptions as the R3 zoned dwelling is being used as an R1 dwelling. This is a request that needs to be made to council every 5 years and is passed onto the Valuer General to allow a land valuation to be provided for both an R1 and a R3 land usage. However, this does not mean that the difference between R1 and R3 rates are forgiven, rather it is a rate postponement.
The Valuer General provides land valuations once every 3 years. The next valuation for Leichhardt is around 1/7/2025.
Therefore, the accrual of the R1 to R3 rate differential will commence 1/7/2025 when the Valuer General provides the Land Valuations for both an R1 and R3 to council. IWC will:
- Calculate both the R1 and R3 rates to be charged
- The rates notice will be issued based on the dwelling being used as an R1 dwelling
- IWC will accrue the difference to between R1 and R3 rates.
If a property is sold in or after the 2031 fiscal year (assumption that IWC has a 30 June end-of-year), then the seller would have to pay the full 5 year rate difference to the IWC when the property is sold as part of the sale conveyancing/settlement.
IWC has not been able to provide what this differential between R1 and R3 rates would be.
Impact:
Less capital to acquire a new dwelling or to provision aged care facility costs.
Notes:
1. In addition to having to pay the rates difference between R1 and R3 when the property is sold, interest is also charged on this accrual up to a maximum of 9 percent (as per IWC policy 1/12/2023)
2. The IWC exemption/rate postponement policy applies to dwelling usage not current ownership. If a current owner/occupied sells to a non-developer, the next owner is eligible for the rate exemption/postponement policy. You do not need to sell to a developer – but you will need to declare the R3 zoning and financial implications to the buyer.
Read the Lungs Of Leichhardt Submission to Council
For more information on this and other issues, see the Lungs of Leichhardt community group’s full submission to the Inner West Council.