RATES AND CHARGES 2022/2023
WHY DO WE NEED RATES?
Rates are an important part of Council’s ability to fund and deliver essential community infrastructure and services. From roads and bridges to the parks and playgrounds, gardens and reserves, sports facilities, ovals, public toilets, and waste facilities, almost everything you see from your front gate is provided by councils. Rates are Council’s largest source of income.
WHAT RATES AND CHARGES DOES COUNCIL HAVE?
When we say ‘charges’ we mean rates charges that appear on your rates notice. We do not mean the various user fees and charges such as facility entry fees, planning fees, dog registration fees and so on.
STORMWATER REMOVAL CHARGE
Council provides stormwater infrastructure to provide for the effective drainage of water runoff. These systems, which can include open drains and creeks, as well as infrastructure like pipes and pumps, need to be operated and maintained effectively. Council applies a stormwater removal charge to cover these costs. The charge is only applied to those properties where the service is supplied. For 2022/23 this charge is $125.
WASTE MANAGEMENT – KERBSIDE COLLECTION CHARGES
Council provides waste management services including kerbside collection of rubbish and recycling, and applies a waste management charge to cover these costs. The charge is only applied to those properties where the service is supplied.
The charge varies according to the size and number of the bins being collected, and in 2022/23 are:
- $195.00 for each 120 litre mobile garbage bin
- $292.00 for each 240 litre mobile garbage bin
- $119.00 for each mobile recycling bin
A FIRE RATE – FIRE SERVICE ACT 1979 CONTRIBUTIONS
This is a State Government levy. Each year Council is advised by the State Fire Commission of the amount it must contribute to fund the Commission to enable it to provide firefighters, training, infrastructure, and life-saving equipment. The Commission advises how much must be recovered from properties within the volunteer brigade district, and the balance from the general land district. They also advise of the minimum amount payable – for 2022/23 this is $44.
GENERAL LAND FIRE DISTRICT
For 2022/23 Council applies a General Land Fire District Rate of 0.010980 cents in the dollar of property capital value. A property with a capital value of $500,000 would be subject to a fire rate of $54.90.
VOLUNTEER BRIGADE FIRE RATE
For 2022/23 the Volunteer Brigade Fire Rate is 0.012925 cents in the dollar of property capital value. A property with a capital value of $500,000 would be subject to a fire rate of $64.62. This rate applies to all rateable land in the Cygnet, Dover, Franklin, Geeveston and Huonville Volunteer Brigade Rating Districts.
THE GENERAL RATE
As the name suggests, this rate goes to generally funding, in full or part, the majority of the services and programs that Council provides. It represents the largest component of rates and charges income and is further explained below.
Further information about rates and charges
HOW YOUR RATES ARE CALCULATED
The Local Government Act 1993 provides some general principles that Council must apply in setting rates. These are that rates constitute taxation for the purposes of local government, rather than a fee for a service and the value of rateable land is an indicator of the capacity of the ratepayer in respect of that land to pay rates. It also provides that rates are to be based on the value of a property. Councils can choose to base rates on land value, capital value (the land plus improvements to the land) or assessed annual value (essentially an estimate of the annual rental value). Council chooses to use capital value.
Taken together, what these principles mean is that more taxation (rates) is paid the higher the valuation of the property.
Each year the Council calculates how much money is needed to provide its services and programs. This is done when Council is preparing its annual budget.
To determine the amount each ratepayer needs to pay, Council divides how much it needs to raise in general rate income by the total combined value of all the properties that are subject to the general rate. The resulting figure is called the ‘general rate’ or the ‘general rate in the dollar’. The General Rate applies to residential and owners of vacant land. The rate in the dollar is varied for commercial and industrial properties.
The value of each property is used as the basis for calculating what each property owner will pay – that is, the property capital value is multiplied by the general rate. As noted above, the higher the property valuation, the higher the rates payable.
The general rate for 2022/23 for residential and vacant land is 0.2420 cents in the dollar of capital value so a residential property with a capital value of $500,000 would be subject to a general rate of $1,210. Council also establishes a minimum amount so that all rateable properties make a base contribution to the cost of Council’s services and programs and infrastructure. For 2022/23 this amount is $418.
The general rate for land predominantly used for commercial purposes is 0.40000 cents in the dollar of capital value and for industrial purposes is 0.3300 cents in the dollar of capital value.
A copy of the Council’s rates resolution is available online here or by inspection at the Council’s Customer Service Centre, 40 Main Street, Huonville.
Under Section 129 of the Act, a rates remission is granted to rateable land that has been covenanted for conservation in perpetuity under either the Private Forest Reserves Program or the Protected Areas on Private Land Program.
The remission is $5.00 per hectare, with a minimum remission per rateable property of $138.00 and a maximum remission per rateable property of $500.00 – provided that the minimum general rate will not be less than $280.00 per rateable property.
Lessees and licencees who hold leases and licences from the Crown in relation to jetties/slipways and boatsheds so that the total general rate applicable do not exceed $138.00. Fire service contributions and service charges where applicable are to be levied.
As stated, rates are based on property value. These values are calculated by the State Government Valuer-General. The Valuer-General is responsible for establishing and maintaining the Statutory Valuation program for each municipal area under the Valuation of Land Act 2001.
Fresh valuations are generally undertaken every 6 years. The Huon Valley Council’s revaluation was scheduled for 2021, however due to delays associated with COVID-19, the fresh valuation year for the Huon Valley is 2022, with the new valuations having effect for 2022/23.
Values are adjusted every two years, and supplementary valuations are undertaken during the six year period whenever a major change occurs to some aspect of a property (eg. when a residence is built on land which was previously vacant).
The three values assessed are Land Value, Capital Value and Assessed Annual Value (which cannot be less than 4% of the capital value).
Your Notice of Valuation is sent to you from the Office of the Valuer-General.
Information about your valuation is available online at www.nre.tas.gov.au/land-tasmania/office-of-the-valuer-general. Enquiries should be directed to the Office of the Valuer-General on 6165 444 or OVG@nre.tas.gov.au.
WHAT IF I DON’T AGREE WITH MY PROPERTY VALUATION?
If you disagree with a valuation, you have 60 days from receipt of the Notice of Valuation, to lodge an objection with the Valuer-General. It can take up to 6 months to finalise objections, depending on the complexity of the issues and the number of objections being dealt with at the time.
GROUNDS FOR AN OBJECTION
The following are the only basis on which an owner of land can object to their Notice of Valuation.
- land value, capital value or assessed annual value assigned to any land is too high or too low;
- interests of the several persons having an interest in any land have not been correctly apportioned;
- apportionment of any valuation is not correct;
- lands which should be included in the one valuation have been valued separately;
- lands which should be valued separately have been included in the one valuation;
- person named in any Notice of Valuation is not an owner of the land to which the notice relates; and/or
- area, dimensions or particulars of any land are not correctly described.
No other basis for an objection can be accepted, for example an owner of land cannot object about their land tax or local council rates.
Please refer to the Office of the Valuer-General website for more information.
REVALUATIONS AND THE GENERAL RATE
The Council provides a range of services programs and projects which need to be funded through the general rate. In a normal year (a non-revaluation year), where Council determines that general rate revenue needs to increase to fund services and programs, this is effected through an increase in the general rate ie: the rate in the dollar that is applied to the property capital value.
The 5% increase endorsed by the Council is an increase on the total revenue to be collected in General Rates across the entire municipal area. In a normal year, all properties would receive a 5% general rate increase.
However, 2022/23 is a not a normal year. This is because of the revaluation. Revaluations of properties are necessary because as noted above, a principle within the Local Government Act 1993 is that property value is used as the basis for determining rates. It is therefore necessary for those valuations to be updated periodically, so as to enable rates to be equitably applied.
However, an outcome of revaluations is that individual property valuations change to differing degrees. One property’s valuation may not change, another might increase by 20%, another by 50% and so on. The effect of these differing changes is that each property may now represent a different overall share of the rates burden, based upon their new valuation.
The outcome of this is that general rates assessments in 2022/23 are a combination of Council’s 5% rates increase, and the redistributive effects of the revaluation meaning the effects will differ for everyone. Some property’s rates assessments may be similar to 2021/22 and some will receive rates increases – which may be less than 5% or more than 5% – in which case these are caused by the revaluations. For the same reasons, some properties will receive rate decreases.
An example might assist to understand how a revaluation works.
Let’s assume Council needs to raise $5,000 in general rates and there are three properties, valued as follows:
Property A $200,000
Property B $300,000
Property C $400,000
The rate in the dollar is $5,000/$900,000 = 0.0055555
The rates payable by each property are (rounded):
Property A $1,111
Property B $1,667
Property C $2,222
Now a revaluation occurs and Property A increases in value by 20%, property B by 30% and Property C by 40%.
We now have:
Property A $240,000
Property B $390,000
Property C $560,000
The rate in the dollar is $5,000/$1,190,000 = 0.0042016 (the rate in the dollar is now lower).
The rates payable by each property are (rounded):
Property A $1,008 being a decrease
Property B $1,639 being a decrease
Property C $2,353 being an increase
Total $5,000 no change
From this we can see that because each property’s valuation has changed to differing degrees, they now represent a different share of the combined value of all three properties. As a result of this, they now are subject to a different share of the overall rates burden – meaning in this example two properties have lower rates, and one higher rates. In simple terms, a revaluation of property has a redistributive effect on rates, because property valuations have moved to differing degrees.
PAYING YOUR RATES
All rates and charges are payable by four instalments which are due on the following dates:
- 12 August 2022
- 31 October 2022
- 31 January 2023
- 28 April 2023
DEFAULT IN PAYMENT OF RATES INSTALMENT
If a ratepayer fails to pay any instalment within twenty one (21) days of the date on which the rates are due, the Council may require the ratepayer to pay the full amount owing, under Section 124(5) of the Act.
If any amount of rates or charges, or an instalment, remains unpaid after the date on which they fall due, the Council will impose a penalty of 3% of the outstanding amount, and charge interest of 8.13% per annum, calculated daily. A remission of penalty or interest that may be applied under this clause may be granted to any ratepayer who has entered into, and complies with, alternative and flexible payment arrangements or has an approved rate payment deferral under the Council’s Financial Hardship and Payment Assistance Policy.