Councils help local communities run smoothly. They administer various laws and regulations to help maintain and improve services and facilities for the community. These services include community services, sporting and recreation services, environmental planning, public health, environmental protection and waste collection, treatment and disposal. The rates you pay allow your council to fund these services.
Each council is required to determine the combination of rates, charges, fees and pricing policies needed to fund the services it provides to the community. This is called a revenue policy. The revenue policy contains a rating structure that determines which rates and charges you will have to pay and how they will be calculated. Charges are generally determined on either an annual basis or according to usage - or they may be a combination of both, for example, water supply charges.
Councils can choose how they calculate and distribute rates among categories of rateable properties in the council area. For each category or sub-category, rates can be calculated in one of three ways. They can be based:
- entirely on the land value of the property
- on a combination of the land value of the property and a fixed amount per property
- entirely on the land value, but subject to a minimum amount.
The land value is determined by the Land and Property Information Division of the Department of Lands (formerly known as the NSW Valuer General's Office).
Each parcel of land must be included in one of four categories for rating purposes:
- farmland or
Council decides which category your property should be in based on its characteristics and use. Most people are charged ordinary rates under the residential category.
Categories are important, because rates differ depending on the category of the land. So if your land is, for example, categorised as farmland you may pay a lower rate per dollar of land value than if your land is categorised as business. If you are not satisfied with the category given to your property, you may apply to council for the category to be reviewed. If you do this, council must notify you of their decision and the reasons for that decision. If you still do not agree with the category given to your property, you may appeal to the Land and Environment Court. You must do this within 30 days of receiving council's review decision. Contact the court to find out how to lodge an appeal.
Yes. However, they must notify you of this change and advise that you can seek a review by the council if you don't agree with the category. This notice must also explain your appeal rights to the Land and Environment Court.
Councils don't determine your land value for rating purposes. Land is valued by the Valuer contracted by the Valuer General under the Valuation of Land Act 1916 (as amended). These valuations are carried approximately every 3-4 years and you should receive a valuation notice after it is done.
If you don't agree with the land value you have 60 days to object. The Department of Land and Property Management Authority will provide you with an objection form free of charge by calling 1800 110 038 or you can download a form at www.lpma.nsw.gov.au
Every year, before the final amounts are fixed, councils must prepare a draft operational plan that includes their proposed revenue policy for the following year. This policy must include details of all rates and charges that the council is proposing to levy on ratepayers.
The operational plan must be made available to the public and can be found on Council's website through this link.
The draft management plan must be put on exhibition to give members of the public an opportunity to comment. This usually happens around April or May each year. Councils must consider any submissions by the public before adopting the plan. This is your opportunity to raise any issues about the rates and charges for the following year. Once the rates and charges have been adopted for a particular year, they cannot be changed until the next year.
The government sets a limit on the total amount of income that a council can raise from certain rates and charges. This is called the rate-peg percentage and it is specified by the Minister for Local Government each year.
Because of rate pegging, council's overall rates revenue cannot increase by more than the percentage increase approved by the Minister. If overall land values rise, councils may have to reduce or otherwise adjust the amounts levied per dollar so that total income does not grow by more than the percentage increase approved by the Minister.
Yes. Rate-pegging applies to a council's overall general income and not to rates on individual properties. Within rate-pegging it is possible for some rates to increase by more than the rate-peg limit while others may increase by less than the rate-peg limit. In some cases, rates may decrease from the previous year. A council's rating structure and valuation changes are the main factors that will determine what happens to rates on an individual property. Rating structures may change significantly from year to year.
No. Only certain rates and charges are subject to rate-pegging. Rates and charges for waste management, water, sewerage and stormwater are not subject to rate-pegging.
Councils can apply to the Minister for Local Government to increase their general income by more than the rate-peg limit. This is called a special variation application. The council must include details of its intention to apply for a special variation in its draft management plan and consider any submissions received from the public. If approved, the Minister will specify the percentage by which the council may increase its general income.
Is there any way to control the increases on rates and charges that are not subject to rate-pegging?
Even though certain rates and charges are not subject to rate-pegging, councils are still required to provide details of what they are proposing to charge in their draft management plan and must consider submissions from the public before adopting those rates and charges. Annual charges for domestic waste management services and stormwater must be calculated to reflect the reasonable cost of providing those services to the community.
Yes. The Local Government Act requires councils to levy an annual charge for providing domestic waste management services on all parcels of rateable land for which the service is available, whether or not it is actually used. It is considered that all property owners should contribute to the current and future provision of waste services.
Councils can charge properties that do not use the service a different amount from those that do use it. However it is up to each council to decide whether they want to do this.
The Department of Energy, Utilities and Sustainability has issued best practice pricing guidelines to encourage the effective and efficient delivery of water supply and sewerage services, and to promote sustainable water conservation practices and water demand management throughout NSW. Until these guidelines were produced, councils adopted various methods of charging for water supply and sewerage services. Councils are now moving to best practice pricing. As a result, the way in which you are charged for these services may have changed quite significantly.
Concessions are available for eligible pensioners. To be an eligible pensioner you must receive a pension from either Centrelink or the Department of Veterans' Affairs, and be entitled to a pensioner concession card issued by the Commonwealth Government. You can only claim a concession on the property if it is the sole or principal place you live.
You need to complete a pensioner concession application form. You can obtain these forms from your council.
- Half of the total of your ordinary rates and domestic waste management service charge, up to a maximum of $250.
- Half of your water rates or charges, up to a maximum of $87.50.
- Half of your sewerage rates or charges, up to a maximum of $87.50.
No. The amounts are fixed.
Is there any plan to increase the concession amounts?
The NSW Government determines the amount of the concessions and, although the level has remained constant for a number of years, the last increase to the concession for ordinary rates from $175 to $250 was significant.
The cost of providing mandatory concessions is met by both state and local government. Any increase in the existing limits would increase the cost of the scheme and may have an adverse impact on the services that councils provide to the community. There are currently no plans to review the concessions.
Yes, although the cost of providing additional concessions must be met entirely by the council. It is up to each council to decide whether to grant additional concessions.
You may be eligible for a concession on the grounds of hardship. Councils may also be able to assist by agreeing to alternative payment plans or writing off interest on unpaid rates. If you are having difficulty in paying your rates, you should contact your council as soon as possible to discuss the options available.
There are some parcels of land that are exempt from rates and charges. These include parcels of land within a national park and land that belongs to, for example, a religious body or school.
Unless you meet the exemption criteria outlined in the Local Government Act, you cannot be exempt from paying rates.