Bill would let City of Melbourne charge derelict sites 4x rates

A state bill introduced to parliament in June 2026 would let the City of Melbourne charge owners of long neglected sites up to four times the lowest differential rate, double the current cap, as part of a push to deal with derelict properties in Carlton. Herald Sun and 9News Melbourne this week each posted about a long derelict Carlton site, with Herald Sun naming the address as 1-23 Rathdowne Street and describing it as dilapidated and rodent infested, and 9News Melbourne referring to the former Cancer Council building. Neither outlet post names the site’s owner.

Why it matters

The bill, the Local Government Legislation Amendment (Stronger Communities) Bill 2026, amends the City of Melbourne Act 2001 rather than applying statewide, and it changes a financial lever rather than creating an order or notice power. Differential rates are currently capped at twice the council’s lowest rate; the bill would raise that to four times, while keeping Net Annual Value as the valuation base. The aim, as described in parliament, is to give owners of vacant or derelict sites a bigger financial incentive to sell, repair or redevelop rather than sit on a boarded up property.

Both outlet posts describe new powers or laws forcing the sites to be fixed up. That is the intended effect of a higher rate bill, not a direct repair or demolition order. Neither outlet post names the specific instrument. The former Cancer Council building, previously reported at 1 Rathdowne Street, has sat vacant since being sold to private interests in 2013, with a 2022 tower proposal rejected and a 2019 interim upgrade plan that was never built. Whether that address and the “1-23 Rathdowne Street” site named by Herald Sun are the same corner property is not confirmed by either outlet post.

Acting Lord Mayor Roshena Campbell said the rate change “does not generate any additional revenue for the council,” framing it as a pressure tool on owners rather than a council funding measure. Both properties sit a few blocks from SP Setia’s proposed $750m three-tower plan at Bouverie and Queensberry streets, which is lodged with the City of Melbourne and not yet approved.

The numbers

The bill would lift Melbourne’s differential rate ceiling from two times to four times its lowest rate, the figure set out in the bill introduced in June 2026. Two Carlton properties were named across the two outlet posts reviewed for this story: the Rathdowne Street site Herald Sun described as rodent infested, and the former Cancer Council site 9News Melbourne said new laws would force to transform. Councillors backed a review of how the council handles vacant and unsafe premises in September 2025, ahead of the bill’s introduction.

What’s next

The bill was introduced in June 2026 and neither outlet post nor the record reviewed for this story confirms it has since passed state parliament, so the higher rate cap is not yet in force. Once councils gain the power, the test will be whether owners of sites like the Rathdowne Street property move to sell, repair or lodge a redevelopment application rather than absorb a quadrupled rate bill. Any planning permit for demolition or new use on the site still needs to be lodged by whoever holds title, a step that has not happened despite years of council pressure. The next marker for this story is confirmation of the bill’s passage and whether either Carlton owner responds.