General rates
General rates are based on the unimproved land values supplied to Council and the land owner by the NSW Valuer General.
The Valuer General has also published a fact sheet for Councils about land values and council rates, which can be found here.
Land valuations
Unimproved land values are determined by the NSW Valuer General every three years. As Council’s rates income is limited by rate pegging, an increase (or decrease) in your land value does not necessarily mean a corresponding increase (or decrease) in your general rates.
Rating categories
All rateable land within the local government area are categorised as either residential, business or farmland, depending on the lands dominant use. Sub categories of these three categories may be used based on centres of population (ie: Towns or Villages) within the LGA.
Rate pegging
Each year the NSW State Government through the Independent Pricing and Regulatory Tribunal (IPART) approves a maximum percentage increase in the total income a council can receive from rates, thereby limiting the amount of income a council can raise via general rates.
GST
Council rates are exempt from the goods and services tax.
Stormwater Management Charge
Property owners within the Yass township are required to pay a stormwater management charge that contributes to the cost of providing new or additional stormwater services. Non rateable or vacant properties are exempt from this charge.
Waste Management Environmental Charge
All rateable properties within the local government area are required to pay a waste management environmental charge. The income from this charge is used to offset the cost of Council’s waste management and recycling operations.
Domestic Waste Management Charge
All residential properties within a designated garbage collection area are provided with a weekly garbage collection and a fortnightly recycling service. Under the Local Government Act, it is mandatory for all rateable properties within the designated collection area (including vacant land) to be charged for this service.
Water Availability Charge
All rateable properties that are within 225 metres of a Council water main, are charged for water availability whether connected to the water supply of not.
Sewerage Availability Charge
All rateable properties that are within 75 metres of a Council sewer, are charged for sewer availability whether connected to the service or not. For residential properties, this is a fixed yearly charge. For non-residential properties, the charge is determined by previous water usage with a minimum charge applicable.
Onsite Sewage Management Charge
All property owners with an onsite sewage management system (septic tank, AWTS or worm farm etc) are required to pay this annual charge. This ensures the landowner is compliant with Section 68 of the Local Government Act 1993 which requires a current 'Approval to Operate' for all systems.
NSW Rating:
Rating in NSW is generally explained as local tax imposed on land owners within defined boundaries. The income from this tax is the principal means of financing councils who provides public services which retain or enhance the value of properties within their Local Government boundaries. The power of council’s is controlled by various Acts of State Parliament, such as the NSW Local Government Act 1993.
Income derived from rates is spent on local services such as roads, footpaths, sports fields, libraries, parks, pools, community halls etc. as well as regulatory requirements such planning, building and compliance matters.
The total income councils can raise is subject to an annual rate peg unless a special variation is approved by the NSW State Government.
To simply explain: If a council can raise $10 million dollars in rates one year and the rate peg is 2% for the following year, the council can only raise an additional $200,000 making the total rates $10.2 million. This is referred to as council’s ‘Notional Yield’.
In NSW, all rates are based on the Unimproved Land Value (ULV) supplied to council by the NSW Valuer General. These ULV’s are reviewed every three years. Generally these reviews result in the ULV for individual properties increasing however that does not mean the rates can increase by the same amount as councils are still subject to the rate peg explained above.
Categorisation:
All rateable properties (that is, properties that are in private ownership) are categorised in one of the following categories:
- Residential
- Business
- Farmland
- Mining
Both the Residential and Business categories may then be sub-categorised based on centres of population (gazetted towns and villages). Rates are then levied on each category or sub category in one of the following ways:
- ULV x Ad Valorem (Cents in the Dollar)
- Base Charge + ULV x Ad Valorem
- ULV x Ad Valorem with a Minimum Charge
Base charge:
The Base Charge is a flat amount charged across the category or sub category that is combined with the ad valorem amount. This has the effect of ‘evening’ out the rating structure across the category or sub category to more fairly distribute the rating burden. The end result is those ratepayers whose ULV is quite high pay less whilst the ratepayers whose ULV is low pay more.
To demonstrate, below are five rural residential properties that are all roughly 20 hectares in size, located in various parts of the council area (please note – all examples are purely hypothetical).
- Has a ULV of $75,000
- Has a ULV of $140,000
- Has a ULV of $190,000
- Has a ULV of $245,000
- Has a ULV of $350,000
If we apply only an ad valorem rate of .005 to each of the properties the result is as follows:
- $75,000 x .005 = $375.00
- $140,000 x .005 = $700.00
- $190,000 x .005 = $950.00
- $245,000 x .005 = $1,225.00
- $350,000 x .005 = $1,750.00
That means council will raise $5,000 in rates from the five properties.
Alternatively if Council uses a base charge of $300 with an ad valorem of .0035 to raise the$5,000 the effect is:
- $300 + $75,000 x .0035 = $562.50
- $300 + $140,000 x .0035 = $790.00
- $300 + $190,000 x .0035 = $965.00
- $300 + $245,000 x .0035 = $1,157.50
- $300 + $350,000 x .0035 = $1,525.00
The end result is a more accurate reflection of the benefit of council’s services v the amount paid by the five ratepayers.
By using a base charge as shown above rates are spread more evenly across ratepayers ensuring a more equitable outcome.
Minimums:
Minimum rates are similar to Base Charges insofar as they have the effect of ‘evening’ out the rating structure across the category or sub category.
To demonstrate this, below are five examples of town blocks of varying size but who all receive exactly the same services (again these examples are hypothetical)
- Has a ULV of $100,000
- Has a ULV of $120,000
- Has a ULV of $170,000
- Has a ULV of $250,000
- Has a ULV of $360,000
If we only apply an ad valorem rate of .0025 to these properties the result is as follows:
- $100,000 x .0025 = $250.00
- $120,000 x .0025 = $300.00
- $170,000 x .0025 = $425.00
- $250,000 x .0025 = $625.00
- $360,000 x .0025 = $900.00
That means council will raise $2,500 in rates from the five properties.
If council then introduces a minimum charge of $400.00, the ad valorem rate drops to .002131 and the effect is:
- $100,000 x .002131 = $213.10 (Under Minimum, so will be charged $400)
- $120,000 x .002131 = $255.72 (Under Minimum, so will be charged $400)
- $170,000 x .002131 = $362.27 (Under Minimum, so will be charged $400)
- $250,000 x .002131 = $532.75
- $360,000 x .002131 = $767.16
Again, the end result is a more accurate reflection of the benefit of council’s services v the amount paid by the five ratepayers.