‘D-grade property developers’ in Town Hall, say Council tenants
The City of Sydney was behaving like a “D-grade southern Queensland property developer” towards its retail tenants in Oxford Street, said Phil Wharton, one of the tenants slugged with Land Tax bills between $15,000 and $30,000 each (City News June 4 2009).
“Council is seeking to wash its hands of the whole issue when clearly there is merit to what we are saying,” he said.
It seems Mr Wharton is right – Council this week has retreated to a ‘No comment’ stance on the issue. Councillors are also keeping mum except for Chris Harris who said that if tenants had been misled then council should stump up the money.
Land tax is normally levied on land owners, not tenants, except when the owner is a government authority, for example the City of Sydney. Hence the tax slug. Tenants claim Council had not revealed the tax during lease negotiations. They say landlords are obliged to reveal all outgoings so that they can be factored into rent negotiations, and are considering mounting a class action against Council.
Last week The City News reported excerpts from a Council response to these claims. Since then, Wayne Nicol from Sax Fetish, one of the affected tenants, has rebutted the Council statement point by point in an email exchange.
But Council has refused to respond further, simply saying it stood by the response.
A summary of Council’s statement and Mr Nicol’s rebuttals follows:
Council: “The former South Sydney Council wrote to all Oxford Street tenants in 1991, informing them that they could be liable to pay land tax from 1992.”
Reply: “Any correspondence relating to 1991 would be a little academic given that there would be approximately three City of Sydney tenants on Oxford Street that were trading in the same location back then. In any event the operative word in this statement was ‘could’. Since the alleged correspondence was 17 years prior to any assessments being issued it would have been reasonable to conclude that common sense had prevailed and the matter had never been referred to the State Revenue Office.”
Council: “The City has also written directly to some tenants in the last few years advising that registration and stamp duty on the lease and any applicable Land Tax as per the Land Tax Management Act is payable by the lessee.
Reply: “I have been in communication with many tenants and no-one has received these alleged letters. What logic was being applied here to write to only “some tenants”?
Council: “The City’s commercial rents are adjusted to reflect the tenant’s land tax liability.”
Reply: “This one is a categorical lie. When challenging rental negotiations The City has sought out “independent” valuations from real estate valuers. I have seen several of these and they use as a point of reference commercial rents without any readjustment for potential land tax liability.”
Tenants say that Clover Moore MP showed “some modest compassion” by challenging the inequity of the tax laws and requesting that they not be applied retrospectively. These requests were ignored, and now Clover Moore Lord Mayor has distanced herself from the issue, not responding to a separate request for comment on the above exchange.
by Michael Gormly
