Georges River Council has been accused of imposing an extra tax burden on Mum and Dad developers who want to upgrade their homes.
Former Hurstville mayor, Con Hindi said the decision to introduce the Georges River Council Section 94a Development Contributions Plan is unfair and will make housing more unaffordable.
Section 94 contributions are levied on developers of large projects to pay for infrastructure and public domain works to cater for increases in density flowing on from these new developments.
Section 94a contributions are on smaller developments such as dwelling houses, alterations and additions to existing dwelling houses, secondary dwellings, boarding houses, and seniors housing.
The former Kogarah Council introduced a Section 94a Contributions Plan in 2015 but Hurstville Council rejected introducing its own Section 94a levy in 2011.
Georges River Council has now extended the contributions plan adopted by Kogarah Council to cover residents in the former Hurstville local government area for developments worth more than $100,000.
This will “ensure equity of charging across the entire local government area”, a Georges River Council spokesperson said.
Under the changes, introduced earlier month, developments of between $100,000 to $200,000 will incur a new levy of 0.5 per cent.
Developments over $200,000, will have a levy of one per cent.
The levy will apply to any application that has not been determined prior to February 1, regardless of when it was lodged.
It is anticipated to generate approximately $1.5 million to $1.8 million per annum for Georges River Council which will be dedicated to making improvements to local infrastructure.
“Development that generates additional demand for local infrastructure will be levied,” the council spokesperson said.
“In most instances Mums and Dads will obtain a credit or an exemption unless the scale of the development generates the need for improved infrastructure such as libraries, parks, playgrounds, pools and roads.”
But Mr Hindi said, “This exemption will not apply to anything over $100,000, which will be 95 per cent of all development.
“Premier Gladys Berejiklian announced her priorities as to make housing affordable yet Georges River Council, which is run by a government appointed administrator, decided around Christmas time to impose an additional tax onto new homes and renovations,” he said.
“The government said it wants affordable housing and at the stroke of a pen the administrator introduced a new tax.
“We could say the former Hurstville Council residents are worse off under amalgamation.
“It’s the introduction of a new tax by stealth to the mums and dads who want to upgrade their home.
“The administrator should reverse the decision and remove this extra tax burden on the community.
“Former Hurstville councillors had unanimously rejected that plan in 2011.
“Until this, we only had Section 94 contributions from big developers. Now new homes, granny flats, extensions and fitting out of shops will incur a tax if the development is greater than $100,000.
“For example, on an extension worth $300,000 you pay an extra $3000.
“If you knock down an old fibro and build a new home valued at $500,000, that’s $5000 more. So how are you making housing more affordable when you impose this tax?
“The reason, according to the new administrator, is that he wanted to bring it into line with the policy of the former Kogarah council.
“But after amalgamation Georges River Council extended the pensioner rebate on rates from Hustville to include Kogarah ratepayers.
“This is what amalgamation is about is to make it better for the residents, not worse.
“So they should drop the tax in Kogarah rather than extend it to Hurstville.
“The council says the money they are taking is to build infrastructure. But when you build a new house then there is no increase in density, therefore there should not they should not be paying an additional tax.
“The council expects to raise between $1.5 million to $1.8 million per annum which will be used to make significant infrastructure. This is money they will pick up from mums and dads.
“If you want to have consistency, remove it from the former Kogarah Council residents and that way ensure consistency and that under amalgamation the residents are getting value for money.”