Intensive Rating Article
The Shire of Gingin raises rates as the primary source of revenue to meet its proposed budget expenditure each year. Where possible under current State Legislation, rates are structured to ensure fairness and equity for all ratepayers.
For 2011/12, 37% of Council’s income is derived from rates, the balance of revenue comes from Federal and State Government grants and “user” charges i.e. refuse collection/tip fees, contributions to works etc.
The demand on Council to spread the rate revenue across all sectors in the community is becoming increasingly complex, given the escalating levels of service and infrastructure needs being demanded throughout the Shire by residents, businesses and visitors.
The Shire also has to deal with the increasing pressure of State and Federal Government cost shifting for services, thus placing a greater reliance on its rates revenue (rates, levies and charges) to fund required expenditure levels.
Current State legislation mandates the utilisation of property valuations as the basis for the calculation of rates each year. Unfortunately, valuations alone do not always produce equitable results for all ratepayers. In addressing such inequities, the Local Government Act provides several options such as differential and specified area rating, to assist councils in achieving equitable solutions.
All property in each local government area is valued by Landgate Valuation Services (a State Government agency). Valuations are forwarded to each local government, based on Gross Rental Value (GRV) for urban land/buildings or Unimproved Value (UV) for rural land.
To calculate the rates payable, local governments multiply a rate in the dollar by the land value. The per dollar rate is determined by the level of revenue the Council raises and is dependent on their proposed budget. There are provisions for Councils to utilise Differential Rates to shift the revenue raising effort to certain sectors of the community i.e. intensive agriculture.
One of the problems identified with the current rural “Unimproved Values” is that intensive land uses appear to skew the rate burden in favour of land where such usages are applicable. In other words, two properties of identical size within the same location, one being used for broadacre farming and the other being used as an intensive feed lot (i.e. Intensive Use) would pay the same rates, notwithstanding that the true value for each enterprise is markedly different.
Differential rating allows Council flexibility in the level of rates being raised from specifically identified properties or groups of properties within the community. It is common for Councils to base differential rating for properties on Town Planning Scheme zonings however other criteria such as land use may be used.
The Differential General UV - Rural Intensive Use and Mining rate in the dollar is the rate in the dollar which is applied to all intensive rural properties and/or Mining tenements as classified by Council within the Shire of Gingin.
The intensive use of a given property may impact significantly on the capital and recurrent maintenance on the local infrastructure and services, i.e. local roads. The use by Council of Differential Rating goes some way to correcting this anomaly and can provide a much fairer and equitable distribution of the limited revenue raising burden across the whole of the community.
The Differential Rate in the dollar (Intensive Farming and Mining), struck by the Shire of Gingin for 2011/12 is 0.4592 cents in the dollar. Council’s non-intensive General Rate for rural properties is 0.2296 cents in the dollar. As a comparison, the Shire’s of Chittering and Dandaragan have adopted General Rural Rates of 0.4520 and 0.5539 cents in the dollar respectively.
The typical rates comparison will vary between properties depending on land use, size of the property and valuation. A comparison of the rates by the Shire of Gingin for the previous two years is as follows:
UV - GENERAL
UV – INTENSIVE/MINING
UV - $640
UV - $705
UV – $855
Applying the rates for 2011/12, a typical rates comparison of properties across the
Shire is as follows:
• Single dwelling in Lancelin/Seabird/Gingin (GRV) - $760 to $800
• Commercial Retail premises in Lancelin (GRV) $1,850 to $4,000
(depending on m2)
• Commercial retail premises in Gingin (GRV) - $1,200 to $3,000
(depending on m2)
• Small 400 hectare property in Gingin (UV Rural) - $5,000
• Small 225 hectare property in Gingin (UV Intensive) - $6,500