Help shape our Revenue and Rating Strategy

Submissions closed on 11 August 2022, 05:00 PM

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We’re undertaking a review of our Revenue and Rating Strategy, as well as our Financial Hardship Policy to assess if these two key documents still meet current best practice and are considered equitable by the community. 

Your input will help us make crucial decisions around the next five years of rates as well as in determining any required changes to our Financial Hardship Policy.

Rating and Revenue Strategy

A Revenue and Rating Strategy is required by Council as it provides us with a method by which we systematically consider factors of importance (for example, legislation) to inform our decisions about the rating system, which is what we use to determine how we charge rates on different kinds of properties within the Shire.

The revenue and rating strategy does not influence the total amount of money to be collected, which occurs in the budget process, only the share of revenue contributed by each property. 

As such, a review of the rating strategy enables us to consider how the rate burden can be most equitably distributed.

Currently, we have a rating structure comprised of three key elements:

These are:

  • General Rates – Based on property values (using the Capital Improved Valuation methodology), which are indicative of capacity to pay and form the central basis of rating under the Local Government Act 2020. General rates are currently broken up into five categories, with each category contributing a percentage to the total collection amount.

These categories and their relevant percentage contributions are detailed in the 'What is a Rating Strategy' section below

  • Service Charges - A ‘user pays’ component for council services to reflect benefits provided by Council to ratepayers who benefit from a service; and
  • Municipal Charge - A ‘fixed rate” portion per property to cover some of the core basic functions of Council.

 

Financial Hardship Policy

We recognise that financial hardship can strike anybody at any time. It can occur as a result of an unforeseen event, or due to ongoing low or fixed income. Through our current policy, we offer flexible financial arrangements for rate payers experiencing temporary and genuine financial hardship and in undertaking this current review, we're keen to understand if further options need to be considered. 

 

 

The collection of rates, or government tax, forms an important part in our ability to deliver essential community infrastructure and services. 

The rates we collect are a form of property tax. The value of each property is used as the basis for calculating what each property owner will pay.

The video below gives a clear explanation of how rates work, and why they're important.

 

 

Our rating strategy determines how rates are distributed amongst properties within the Shire.

It details our decisions relating to the most equitable, practical and efficient distribution of rates and charges across the ratepayers and community members of Indigo Shire.

It is important to emphasise that the rating strategy does not change the total amount of Council’s rate revenue. The rating strategy is only the allocation method used to fairly and equitably spread the rate burden across all Indigo properties. 

Our current rates are structured in accordance with the requirements of Section 94 ‘Differential Rates’ of the Local Government Act 2020, and the Ministerial Guidelines for Differential Rating 2013.

The differential rates, or rating categories are currently set as follows:

Rating Category Current rate (% of general rate)
General 100%
Residential Vacant 200%
Rural 1(properties greater than 40ha ) 75%
Rural(properties between 8 – 40ha) 90%
Commercial/Industrial 135%

 

General Property Rate Definition:

  1. predominantly used for human habitation, and assessed by Council’s valuer as being “Residential” for the purposes of the State Government’s Fire Service Property Levy, or;
  2. not covered by another category.

The categorisation of “general” properties includes small businesses that operate from residential properties that are of small scale and do not cause significant commercial impact on the community.

Residential Vacant Rate Definition:

Residential Vacant land is any land which:

  1. does not contain buildings; and
  2. is of a type that permits residential development.

Residential vacant land has the potential to be developed for residential type accommodation that will place a similar demand for Council's services as the other residential type classifications

Rural Rate – Rural 1 and Rural 2 Definition:

Rural 1 property is any property which is:

  1. greater than 40 hectares in area; and
  2. used for Farm Land as defined in Section 2 of the Valuation of Land Act (1960).

Rural 2 property is any property which is:

  1. greater than 8 hectares and less than 40hectares in area; and
  2. Used for Residential or Farm Land as defined in Section 2 of the Valuation of Land Act (1960).

Commercial/Industry Rate Definition:

Commercial/Industrial Land is any land, which is:

  1. assessed by Council’s valuer as being Commercial or Industrial for the purposes of the State Government’s Fire Service Property Levy
  2. operating on a commercial / industrial basis.

 

By contributing to our survey, you can help us make crucial decisions around the next five years of rates. Are the current rating categories appropriate? Should there be additional categories? Fewer categories? Should the rates applied to each category be different?

It is important to note that this survey is not about how high your rates are or how valuations of properties are conducted, instead the purpose of this review is to determine if there is a more equitable way to distribute the rate burden across the Shire.

In completing the survey, your input will help influence:

  • The differential categories

  • The differential percentage amounts

  • The Municipal charge (fixed/variable)

  • Our Hardship Policy

Complete the survey