Rates are a tax levied by council. Their purpose is to support the council in providing services for the benefit of all residents. Rates help pay for:
Rates are normally made up of a general rate and a service rate and/or charge. Under certain circumstances, a council may levy a construction rate or charge, or a separate rate.
The rights and responsibilities of ratepayers and councils are set out in Part 9 of the Local Government Act 1993.
A general rate is a 'progressive' tax, reflecting the land, capital or Assessed Annual Value (AAV) of property. It may involve an additional fixed charge which applies equally to every property.A council may make a general rate whether or not it provides any services to the land upon which the rating is made.
Service rate or charge
A council may make a service rate for any, all, or a combination of the following services:
The service rate is also 'progressive', being determined by the same property value as the general rate. Councils may set a minimum amount payable for a service rate if it does not include a fixed charge.
Councils may levy a service charge in addition to, or instead of , making a service rate.
A service charge is a fixed charge payable on each property. The charge may differ in various parts of the municipal area depending on the type of service being provided and the circumstances in a particular area.
If a service is not provided or is unavailable, the prescribed rate or charge for that service may not apply. Nevertheless, councils may, for example, determine that a service rate relating to water supply and sewage removal still applies to unserviced land if the nearest boundary lies within 30 metres from council pipes that carry water and sewage.
Construction Rate or Charge
A construction rate or charge may be set by councils in order to provide the infrastructure currently lacking for water, sewerage or stormwater services to land that is within an established water, sewerage or drainage district.
A council may make a separate rate in respect of any land or class of land within its municipal area. This may occur where, in Council's opinion, there is a need to plan, carry out, make available, maintain or improve anything on behalf of the affected land, or owners or occupiers of that land.
If a council decides to make a separate rate it must undertake a consultation process with the ratepayers of the affected land.
A separate rate may only be made for a 5 year period before it is subject to a review process and further consultation with affected ratepayers.