Many rural landholders received a shock when their rates notice for 2017/18 landed in the mailbox, with some seeing a significant jump while others saw a reduction.
When the ups and downs are tallied Tenterfield Shire Council’s acting chief executive officer Kylie Smith confirmed that total forecast rate levies for the shire increased by the 10 per cent allowed as the fourth (and final) leg of the approved Special Rates Variation. In fact the overall increase is 9.8 per cent, with forecast rates last year totalling $3,949,952 versus this year’s total of $4,336,037.
Some individual farmland ratepayers have received a double hit to the wallet, however, as for them the phased transition to base rate calculations coincides with an increase in land value.
New calculation method
TSC is in the middle of its move from a minimum rate to a base rate (plus ad valorem) calculation method, with Residential Tenterfield and Residential Tenterfield (Urban) ratepayers moved over last financial year. This year it’s the remaining residential and the farmland ratepayers’ turn, with business and mining ratepayers moving next year.
Both the minimum rate and base rate models are allowed under the Local Government Act. Neighbouring councils Glen Innes, Inverell and Armidale have also opted for the base rate method.
Ms Smith said this method is seen as fairer by rating groups as it more closely aligns the rates contribution to the value of the land being rated. Under the minimum rate method, owners of Farmland properties, for instance, valued well below the ‘tipping point’ ($135,958 last year) still paid the minimum rate of $506. Those with higher-valued properties paid that plus an ad valorem of $0.0037 on each additional dollar.
This year all Farmland property owners are paying a base rate of $380, and a lower ad valorem of $0.0029 on every dollar of property value. As a result, those with Farmland properties valued up to around $44,000 with no major increase in land value will be enjoying lower rates. Others will be seeing rates rises, often significant.
Farmland values increasing
Unimproved land values are assigned by the Value General, who advises that land values for the Northern Tablelands region are generally increasing. This was led by good seasonal conditions leading up to the last valuation date of July 1, 2016 coupled with strong commodity prices for beef and lamb.
While Tenterfield’s residential land values remained fairly stable, rural property values increased by an average of 10.2 per cent.
Miss Smith said while it can be a boon to see your property value increase when you’re looking to use it as security on a bank loan or for estate planning, it does also affect rates which can instead be a negative factor if you’re not looking to pass on the family farm anytime soon. Overall the increase in TSC’s total Farmland rates income between last year and this is 9.4 per cent.
Note that the new calculation method affects only property rates and not other fees and charges, which are not limited to the rate peg. Ms Smith said these fees and charges are designed to fully cover council's cost of providing the services.
TSC advises that in certain circumstances alternative arrangements for payment of rates and charges may be made, but that interest charges may still apply. Last year’s interest rate of eight per cent has reduced to 7.5 per cent.
There’s a pensioner rebate of $250 on general rates, and those with a Pensioner Concession Card who don’t see a rebate on their rate notice should contact council's Rates Department. Anyone who disagrees with the category shown on their notice – or the dominant use of the land has changed – should also contact the Rates Department.
The Valuer General’s Department also has a mechanism for those disputing the valuation put on their property. Of Tenterfield’s 5067 valuations, 15 objections were received after the release of the 2013 valuations (of which three were allowed). No more were received until the last round, where seven objections are going through the system.
Some respite from rate increases has been afforded by the indefinite deferment of the Fire & Emergency Services Levy, which had been due to be added to council rates from July 1.