LOGAN City Council could be forced to pay back millions in rates revenue after a landmark Supreme Court ruling on differential rates.
Logan is one of 20 councils across Queensland charging higher rates for property investors than owner-occupied residential properties.
The issue was taken to the Supreme Court by a group of Mackay Investors who were being charged $200 a year above normal residential rates.
The court ruled in favour of the investors, stating that the Local Government Act permitted differential rates to be charged based on the characteristics of the land but not on personal characteristics of the owner of the land.
Logan City Council introduced differential rates in 2006. It currently charges residential rates of 0.3262 cents to each dollar of rateable value.
Non-owner occupied residential land is charged at 0.4326 cents to the dollar.
This means a difference of $266 a year for a $250,000 property.
A council spokeswoman said it was unlikely Logan would be affected by the court case, as its rates were categorised differently to Mackay's.
She said if the council was forced to abolish differential rates, all ratepayers would suffer.
"Between them, Logan's ratepayers would need to fund an additional $6.8 million annually," she said.
The Local Government Association of Queensland (LGAQ) has lodged an appeal against the Supreme Court's decision.
With a date yet to be set for the appeal, CEO Greg Hallam said the LGAQ was seeking advice from the state government on how councils should proceed in formulating their 2014-15 budgets.
"We need to get clear advice from the Queensland government about how they intend to work with us to make sure that we can properly levy these rates into the future," he said.
Mr Hallam said if the appeal was lost, it was possible councils would be forced to repay the rates.
"That is a possibility but we have to be very careful that we don't get into subjudice and presume to speak for the court of appeal," he said.
"But it is a theoretical possibility, that's for sure.
"The court might find in favour of us, they might find in favour of the other side, and then there's still the possibility either parties might decide to go to the High Court as well.
"So this could take a long while."
