Rating Strategy

Thank you for taking the time to ask a question.

The only properties that are exempt from all rates are Council owned.  However, under section 87 of the Local Government Act 1993 (Tas), there are some property types exempt from the general rate component of Council rates.  These properties still pay service rates and charges, for stormwater removal, fire levy and waste management.  Examples of these property types are national parks, nature reserve, public park that provides free public access, is a road, a marine facility and charities that are owned and occupied exclusively for a charitable purpose.   The entitlement to the rates exemption is set out in legislation in section 87 of the Local Government Act 1993 (Tas) so even if a council changed its rating strategy the entitlement would remain the same as required under legislation.  All of the options outlined in the Option Paper are shown using the capital value of a property and the rating option using capital value.  As part of its interim rating strategy for 2023-24, the Council introduced a differential general rate for properties used as short stay visitor accommodation.  The objective was to ensure housing stock is retained but also to ensure that owners of residential land used for the commercial purpose of short stay visitor accommodation contribute to the provision of Council services and facilities that are associated with that commercial use e.g. economic development, tourism, communications and marketing.  This has been in place since 1 July 2023 and changes have occurred as a result.  The City would welcome a review of the current rating legislation to ensure that the rating system in the future is not only sustainable and can support programs, service and infrastructure needs but also ensures a fair and equitable distribution of rates across the municipal area. In distributing the rating burden the rating structure should include the following objectives:

• fairness and equity for ratepayers
• sustainable for councils and affordable for the community.
• supports ratepayers capacity to pay; and
• simple to understand and easy/cost effective to administer.

The reason why higher value properties may pay less in rates if the Council introduced a fixed component of the general rates, is that part of the rate burden would be calculated as a fixed charge that everyone paid.  Thus reducing the amount to be paid using your property valuation, which would mean a lower rate in the dollar for all properties leading to reduced rates for higher valued properties.  The comparisons in Table 11 of the options paper show the impact of a $200 fixed charge on properties with different capital values and different land uses.

If you would like any other information you are encouraged to contact the Rates Team on 03 – 6238 2787, email: coh@hobartcity.com.au or come along to a rates drop-in session.