Part 1 An overview of rates and charges

491   Some sources of a council’s income

A council may, in accordance with this Chapter, obtain income from:

•  rates

•  charges

•  fees

•  grants

•  borrowings

•  investments.

492   What are the types of rates?

The types of rates that can be made by a council are:

•  ordinary rates

•  special rates.

493   Categories of ordinary rates and categories of land

(1)  There are 4 categories of an ordinary rate and 4 categories of rateable land:

•  farmland

•  residential

•  mining

•  business.

(2)  These categories may, at a council’s discretion, be divided into sub-categories in accordance with section 529.

494   Ordinary rates must be made and levied annually

(1)  A council must make and levy an ordinary rate for each year on all rateable land in its area.

(2)  Each category or subcategory of ordinary rate is to apply only to land of the same category or subcategory.

495   Making and levying of special rates

(1)  A council may make a special rate for or towards meeting the cost of any works, services, facilities or activities provided or undertaken, or proposed to be provided or undertaken, by the council within the whole or any part of the council’s area, other than domestic waste management services.

(2)  The special rate is to be levied on such rateable land in the council’s area as, in the council’s opinion:

(a)  benefits or will benefit from the works, services, facilities or activities, or

(b)  contributes or will contribute to the need for the works, services, facilities or activities, or

(c)  has or will have access to the works, services, facilities or activities.

Note. Under section 495, a council could, for example make and levy:

•  different special rates for different kinds of works, services, facilities or activities

•  different special rates for the same kind of work, service, facility or activity in different parts of its area

•  different special rates for the same work in different parts of its area.

The amount of special rate will be determined according to the council’s assessment of the relationship between the cost or estimated cost of the work, service, facility or activity and the degree of benefit afforded to the ratepayer by providing or undertaking the work, service, facility or activity.

496   Making and levying of annual charges for domestic waste management services

(1)  A council must make and levy an annual charge for the provision of domestic waste management services for each parcel of rateable land for which the service is available.

(2)  A council may make an annual charge for the provision of a domestic waste management service for a parcel of land that is exempt from rating if:

(a)  the service is available for that land, and

(b)  the owner of that land requests or agrees to the provision of the service to that land, and

(c)  the amount of the annual charge is limited to recovering the cost of providing the service to that land.

497   What is the structure of a rate?

A rate, whether an ordinary rate or a special rate, may, at a council’s discretion, consist of:

(a)  an ad valorem amount (which may, in accordance with section 548, be subject to a minimum amount of the rate), or

(b)  a base amount to which an ad valorem amount is added.

498   The ad valorem amount

(1)  The ad valorem amount of a rate is an amount in the dollar determined for a specified year by the council and expressed to apply:

(a)  in the case of an ordinary rate—to the land value of all rateable land in the council’s area within the category or sub-category of the ordinary rate, or

(b)  in the case of a special rate—to the land value of all rateable land in the council’s area or such of that rateable land as is specified by the council in accordance with section 538.

(2)  The ad valorem amount of a rate is to be levied on the land value of rateable land, except as provided by this or any other Act.

(3)  An ad valorem amount specified for a parcel of land may not differ from an ad valorem amount specified for any other parcel of land within the same category or subcategory unless:

(a)  the land values of the parcels were last determined by reference to different base dates, and

(b)  the Minister approves the different ad valorem amounts.

Note. Land value is defined in the Dictionary for this Act. Generally, it is a value determined specially for rating purposes by the Valuer-General under the Valuation of Land Act 1916.

A value other than land value may be used, for example, under section 127 of the Heritage Act 1977.

499   The base amount

(1)  A council may, in a resolution making a rate, specify a base amount of the rate, or a base amount for a category or sub-category of an ordinary rate.

(2)  The base amounts so specified may be the same or different amounts.

(3)  The appropriate base amount so specified is to form part of the rate levied on each separate parcel of rateable land subject to the rate.

(4)  A base amount specified for a parcel of land may not differ from a base amount specified for any other parcel of land within the same category or subcategory unless:

(a)  the land values of the parcels were last determined by reference to different base dates, and

(b)  the Minister approves the different base amounts.

500   Limit on revenue that can be raised from base amount

The amount specified as the base amount of a rate (or the base amount of the rate for a category or sub-category of an ordinary rate) must not be such as to produce more than 50 per cent of the total amount payable by the levying of the rate (or of the rate for the category or sub-category concerned) on all rateable land subject to the rate (or the rate for the category or sub-category concerned).

501   For what services can a council impose an annual charge?

(1)  A council may make an annual charge for any of the following services provided, or proposed to be provided, on an annual basis by the council:

•  water supply services

•  sewerage services

•  drainage services

•  waste management services (other than domestic waste management services)

•  any services prescribed by the regulations.

(2)  A council may make a single charge for two or more such services.

(3)  An annual charge may be levied on each parcel of rateable land for which the service is provided or proposed to be provided.

502   Charges for actual use

A council may make a charge for a service referred to in section 496 or 501 according to the actual use of the service.

503   What is the relationship between rates and charges?

(1)  A charge may be made:

(a)  in addition to an ordinary rate, and

(b)  in addition to or instead of a special rate.

(2)  If land is not rateable to a special rate for a particular service, a council may not levy a charge in respect of that land relating to the same service, unless the charge is limited to recovering the cost of providing the service to that land.

504   Domestic waste management services

(1)  A council must not apply income from an ordinary rate towards the cost of providing domestic waste management services.

(1A)  Subsection (1) does not prevent income from an ordinary rate from being lent (by way of internal loan) for use by the council in meeting the cost of providing domestic waste management services.

(2)  Income to be applied by a council towards the cost of providing domestic waste management services must be obtained from the making and levying of annual charges or the imposition of charges for the actual use of the service, or both.

(3)  Income obtained from charges for domestic waste management must be calculated so as to not exceed the reasonable cost to the council of providing those services.