In a Nutshell

Council is proposing to streamline the rate structure with two main changes:

• Reducing the number of rate categories from seven to four by eliminating sub-categories in residential and business
• Changing the way rates are calculated, to include a uniform 'base rate' plus a proportion determined according to property's land value. 

When land valuations change, rates change. Council is required to use the valuations provided by the NSW Valuer General as the main component of calculating rates. New land valuations from the NSW Valuer General must be used in for the 2023/24 financial year.

Maintaining the current method of calculating rates would still result in changes to rates - due to changes in land values. We are required to use the most recent valuations from the NSW Valuer General. 

If we do nothing and continue to use our existing structure, your amount payable may still change by more than the 3.7% rate peg, and in some cases the impact may be bigger. Properties with similar land values will pay different rates based on the location of their property. 

Council is proposing four categories: Residential, Business, Farmland, and Mining. This will require eliminating sub-categories:

• Amalgamate the sub-categories of Residential Town Centre and Rural Residential sub-categories with Residential land, so there is a single Residential rate category
• Amalgamate the sub-category Business Light Industrial sub-category with business land, so there is a single Business rate category
• No changes are proposed for the Farmland rate category
• No changes are proposed for the Mining rate category

Please note that proposed rates are estimates only and subject to change until Council adopts the final rates and charges, which is expected to be in June 2023.

Example 1

Joan owns a residential property which has been valued at $400,000 by the NSW Valuer General. Under the proposed structure, this property would continue to fall under the “Residential” category, which has an “ad valorem” rate of 0.117101 cents in the dollar. 

The proportion of her rates related to land value would be calculated as $400,000 x 0.00117101 = $468.40.

This would be added to the proposed base rate of $970.00 to give an annual total of $1,438.40.

Under the current rate structure, any property within the Residential category valued at $400,000 would pay the minimum rate of $1,598.00.

Joan would be better off by $159.60 per annum under the proposed structure.

Example 2

Barry owns a residential property which has been valued at $2,500,000 by the NSW Valuer General. This property is currently classified as Rural Residential for rating purposes. 

Under the proposed structure, this property would be re-categorised to the “Residential” category, which has an “ad valorem” rate of 0.117101 cents in the dollar. 

The proportion of his rates related to land value would be calculated as $2,500,000 x 0.00117101 = $2,927.53.

This would be added to the proposed base rate of $970.00 to give an annual total of $3,897.53.

Under the current rate structure, any property within the Rural Residential category valued at $2,500,000 would pay their rates based on the ad valorem rate of 0.00173254. His rates would be calculated as:

0.00173254 x $2,500,000 = $4,331.35 per annum.

Barry is better off by $433.83 under the proposed structure.

Example 3

Shannon owns a residential property which has been valued at $700,000 by the NSW Valuer General. This property is currently classified as Residential Town Centre for rating purposes.  

Under the proposed structure, this property would be re-categorised to the “Residential” category, which has an “ad valorem” rate of 0.117101 cents in the dollar. 

The proportion of their rates related to land value would be calculated as $700,000 x 0.00117101 = $819.71

This would be added to the proposed base rate of $970.00 to give an annual total of $1,789.71.

Under the current rate structure, any property within the Residential Town Centre category valued at $700,000 would pay their rates based on the ad valorem rate of 0.00265656. Shannon's rates would be calculated as:

0.00265656 x $700,000 = $1,859.59 per annum.

Shannon is better off by $69.89 under the proposed structure.

Please note that proposed rates are estimates only and subject to change until Council adopts the final rates and charges, which is expected to be in June 2023.

By moving to the proposed base rate structure, properties with similar land values will pay similar rates as illustrated in Examples 3 and 4. If Council uses the current structure, properties with similar land values will pay different rates based on the location of their property.

Council acknowledges that any rate increase may adversely impact some ratepayers. To assist ratepayers who may have difficulty making payment, Council has a Hardship Policy in place. Community members are invited to contact Council for help.

Council must choose a method to calculate rates, which can be:

• Entirely on the land value of the property (i.e. using a rate-in-the-dollar set by Council and multiplying it by the land value provided to Council by the NSW Valuer General)
• Entirely on the land value, but subject to a minimum amount which overrides the rate calculation if it falls below the set minimum rate (this is Council’s current rate structure) 
• A combination of a fixed amount per property (known as a base rate) and a proportion calculated using the property’s land value. 

No, we are not permitted to charge a flat rate so that everyone pays the same amount. We are required to use land value as the main way of determining rates. However, introducing a base rate acknowledges that we should all pay a fair share of core services we can all access.

No, zoning is what determines what land can be used for. Zoning and permitted land use are determined via Local Environmental Plans (LEPs), which are separate from rating categories.