Rates Restructure

Council’s Previous Rates Structure (2020/2021 and prior years)

Previously, your general rates were calculated by multiplying the Capital Value of your property by a “cents in the dollar” rate and then a fixed fee was added.  The Capital Value of your property is the total value of the property, including the land value. The Capital Value is determined by the Office of the Valuer-General.

Under the previous model Council had 20 different rating categories based on the Land Use Codes assigned by the Office of the Valuer-General. Each of the 20 rating categories had a different “cents in the dollar” rate.

Council’s New Rates Structure (2021/2022 and beyond)

Under the new rates structure, your general rates will be calculated by multiplying the Assessed Annual Value (AAV) of your property by a “cents in the dollar” rate and then a fixed fee will be added. The Assessed Annual Value of your property is the estimated yearly rental value of the property. The Assessed Annual Value is determined by the Office of the Valuer-General.

You will notice on your 2021/2022 rates notice the valuation will refer to Adjusted Assessed Annual Value (Adj AAV).  The reason for this is due to the Valuer-General’s 6-yearly valuation cycle.  During the 6-yearly revaluation cycle, the Valuer-General issues adjustment factors to adjust the value of properties by the class and locality of the property. The adjustment factors issued by the Valuer-General are based on broad market movements and are applied twice during the revaluation cycle, every 2 years.

When fresh valuations are issued (6-yearly), the valuation per your rates notice will state Assessed Annual Value (AAV).  When adjustment factors are issued, the valuation on your rates notice changes to Adjusted Assessed Annual Value (Adj AAV).

The new rates structure has 4 different rating categories based on the Land Use Codes assigned by the Office of the Valuer-General. Each of the 4 rating categories has a different “cents in the dollar” rate.

Under the new rates structure your property will either have an increase or decrease in general rates. All rate payers will be paying the same fixed fee. The only change made to the fixed fee in the 2021/2022 financial year will be the annual inflationary increase, which is 2.5%, in line with Council’s Long Term Financial Plan.

Under the new rates structure, boatshed remissions and specified land remissions will no longer be applied. Pensioner concessions and charitable remissions will still apply.

The Impact on Total General Rates Revenue 

The new rates structure will not increase the total general rates revenue raised by Council. The only increase to total rates revenue in the 2021/2022 financial year is the 2.5% inflationary increase, as approved by Council during the annual budget process.

The new rates structure will change how general rates revenue is distributed across properties, however, it will not change Council’s total general rates revenue.

The total rates revenue required by Council each year is determined through Council’s Long Term Financial Plan and what it costs Council to deliver our services to the community and maintain our infrastructure.

Why is Council making the Change?  

The new rates structure is simpler and more transparent. It will be much easier for rate payers to understand.

Council are using Assessed Annual Value and 4 x “cents in the dollar” rates under the new rates structure. The Assessed Annual Value assigned by the Office of the Valuer-General takes into account the economic circumstances of each individual property, including the location of the property and the property Land Use Code classification.

During our rates modelling the Assessed Annual Value options provided less volatile outcomes when comparing the rates models to our 2020/2021 operational rates (e.g. the decreases and increases were not as extreme using the Assessed Annual Value options compared to Capital Value options).

For the above reasons, the majority of Tasmanian Councils use the Assessed Annual Value rating method.

The Role of the Office of the Valuer-General 

The Valuer-General determines each properties Land Use Code and Valuation. These Land Use Code classifications and the Capital Value and Assessed Annual Value valuations assigned to your property are out of Council’s control.

The Valuer-General assigns each property a Land Use Code.  The Land Use Codes are based on the Australian Valuation Property Classification codes (not Planning Schemes). Land Use is grouped into classifications. The 6 primary classifications are: Residential, Commercial, Industrial, Primary Production, Community Services and Other.

The Valuer-General issues fresh valuations (revaluations) every 6 years, with supplementary valuations undertaken during the 6 year period, whenever a major change occurs to some aspect of a property. Adjustment factors are also issued twice in the 6-yearly revaluation cycle (every 2 years). Sorell Council’s next fresh valuations are currently expected to be due in 2023, effective from 1 July 2024.

If you do not agree with the Valuer-General, an objection may be lodged with the Office of the Valuer General. The lodgement of an objection does not alter the requirement to pay rates when due.

Contact the Office of the Valuer-General:

Phone: 03 6165 4444 Email: [email protected]

Web: www.dpipwe.tas.gov.au/land-tasmania/office-of-the-valuer-general

I don’t understand the changes. Where can I go for more information?

If, after reading this information, the changes are still not clear to you, please contact Council’s Customer Service Department between 8.00am and 4.45pm, Monday to Friday, on 6269 0000.