Australia's Future Tax System

Architecture of Australia's tax and transfer system

2.11 Additional tax and transfer tables (continued)

Table 2.20: Local government rates and property charges

Principal legislation Local Government Act 1993 Local Government Act 1989 Local Government Act 1993 Local Government Act 1995 Local Government Act 1999 Local Government Act 1993 Rates Act 2004 Local Government Act 2008
Type of rate Ordinary (s. 492), special (s. 492) General (s. 158), service (s. 162) or special (s. 163) General or differential general, separate or special (s. 963) General, specified area (s. 6.37) General, separate or service rates (s. 146) General (s. 90), service (s. 93), construction (s. 97) General rates General (s. 155), special (s. 156)
Type of charge Annual charges for domestic waste management, other annual charges (s. 496) Municipal charges (s. 159), service charges (s. 162) and special charges (s. 163) Separate charges (s. 972), special charges (s. 971) and utility charges (s. 973) Service charges (s. 6.38) Annual service charges (s. 155) Service charges (s. 94), construction charges (s. 97) or separate charges (s. 100) na Charges (s. 157)
Rate structure Wholly ad valorem or base amount plus ad valorem (ss. 497‑499). Categories of rateable land include farmland (s. 515), residential (s. 516), mining (s. 517), business (s. 518). Optional sub-categories (s. 529). Uniform rates (s. 160), differential rates where CIV is used (s. 161) or limited differential rates where CIV is not used (s. 161A). Limited differential rates include urban farm rates, farm rates or residential use rates (s. 161A). Minimum general rate levy (s. 967). Special rates may include a minimum amount (s. 971(2a)). Councils may decide by resolution the categories of land for the purpose of levying differential general rates (s. 977). Uniform or differential (s. 6.32(1)(a)). Specified area rates or minimum charges (s. 6.32(2)(b)). Differential rates may be imposed based on the purpose of the land, whether it is vacant or other characteristics (s. 6.33). General rates may be based on land value, or a combination of both land value/fixed charge (s. 151(1)). Differential rates may vary according to the use of the land, the locality of the land or both (s. 156). General rates may include a land value and a fixed charge component (s. 91). Variation in rates according to any of the factors under s. 107. If a fixed charge is not set, a minimum amount payable may be set (s. 90(4)). Fixed charge plus a rate charged on the amount that the average UV exceeds a rate‑free threshold (s. 14). Differential rates for residential, commercial and rural properties. Fixed charge for each allotment, a valuation based charge, or a combination of (i) fixed charges (for different purposes) or (ii) a fixed charge and a valuation-based charge (s.148).
Land valuation method LV (s 498(2), Valuation of Land Act 1916, s. 6A). SV, NAV or CIV (s. 157; s. 13DC Valuation of Land Act 1960). UV (schedule 2; Part 3 Valuation of Land Act 1944). Rural: UV (s. 6.28(2)(a)). Non‑rural: GRV (s. 6.28(2)(b)). CV (s. 151(2)) and under some circumstances SV or AV (s. 151(3)). LV, CV or AAV (s. 90). UV averaged over the previous three years (s. 6). UCV, AV or CIV (s. 149).
Rate pegging Yes No (current);
Yes (fixed period in 1990s).
No No No (current);
Yes (fixed period in 1990s).
No No. However, the growth in total rates revenue is capped at WPI plus growth for new properties. No (pre 2008); Yes (limit on rates for a period of 3 years commencing 1 July 2008. Refer to s. 268).

Notes: LV = Land value. SV = Site value. NAV = Net annual value. CIV = Capital improved value. UV = Unimproved value. CV = Capital value. AV = Annual value. GRV = Gross rental value. AAV = Assessed annual value. UCV = Unimproved capital value. WPI = Wage Price Index.

Source: Based on Table B.1 from Productivity Commission (2008a) with updated information provided by state treasuries.