This is the biggest rort I have come across in all my years in developing.
This is likely to be overturned soon given they are holding a committee meeting on the issue. (my view why hole a meeting so soon after making the decision)
The reason this has come in place is as a reaction to state (bligh) capping contribution fees, so local council reacted by doing this BS. So basically private companies like mine are made canon fodder for the little fight state and local are having, what a bunch of immature, idiotic, simplistic minded clowns.
What legalized criminals this mob is!
I rushed to get a development submitted by June 30 of 2010 (literally submitted June 30) to beat the cut-off were most of the subsidy would be stripped away only to now get advice saying they are going to remove it anyways?
Further more the cut-off is June 24 not 30 because BCC dont follow the rest of the worlds understanding of what a financial year actually means?
There are developments were the contribution is in the millions and in their approvals package state that they have a subsidity up till 2012! How can government simply flip on this change it and say pay up literally RIGHT NOW since due to their incompetence it takes 10 business days to calculate how much you have to pay?
This is just amazing to me, I will personally be cancelling all my industry memberships if this is allowed to go through because they are impotent if such a policy is allowed to go through.
I personally think it wont happen and council will backflip and extend the deadline to 2012.
If not I imagine there will be a few court cases taken up. In terms of your question will prices go up? I can say this for certain;
1. Projects will be delayed or canceled
2. Building activity will slow
3. The price being asked for development sites today will be too high for development to be feasible (destruction of wealth)
4. projects currently getting built will need to raise their sale prices to recover or take hits (this will lead to some projects failing\falling over, others loosing money but all will try to lift the asking price)
This is just idiotic policy it truly is, and the public will see this as developers having a cry but my god!! just try to understand being told you have 1 month to pay for something you didnt have to pay for until 1-2 years from today or else loose 35% subsidy! Given contributions average 30k a unit\dwelling you do the math! just a 6 townhouse site will mean a loss of 63k! or a unit complex of a 100? oh just a small loss of 1m+ and this doesnt even include having to find the the 2m within a month to pay it!
And then then the know-it-alls who scoff at developers who say contributions are killing us??
And they want people to invest in this state? shame on them I hope the people who made this decision roll over and die.
I am mid way through a subdivision in Brisbane and just got a letter from Council. They gave me ( and everyone else) a discount but did not tell us what it was. Well its 35% and/or 23% which will expire on June 23 2011. But they will give you a 15% and or 10% discount till Dec 2011.
This is quite significant and wonder if land prices will go up because of it.
I am probably going to be able to pay before the date but thought I would let anyone know that contributions alone are now about $57000 without discount for anyone looking to subdivide in BCC soon.
