Council adopts new approach to calculating rates
A NEW highly praised method for calculating rates, a ‘safety net’ to cushion ratepayers from sharp rate increases and rebates for developers and businesses are key components of a new policy adopted by Wakefield Regional Council last night (27 April).
Council’s new Rating Policy was drafted following significant community engagement and the policy’s central component – a new mathematical model for calculating rates – received praise from community members and Wakefield’s Audit & Risk Committee.
Mayor Rodney Reid said the new model – which has been independently verified by a chartered accountancy firm with significant experience in rating methodology – would factor in annual capital valuation changes and see rates more evenly spread across land use categories.
“Community consultation on this new policy began in March with Council releasing a Rating Consultation paper and draft Rating Policy for feedback and also hosting two community information sessions to allow ratepayers to voice their opinions on the proposed changes to the rating policy,” Mayor Reid said.
“The new policy employs a safety net: when the overall average rate adjustment for a land use category reaches 5% above that year’s general rate rise set by Council, a rate redistribution to other land use categories will occur, shielding ratepayers from a large annual increase.
“This approach also addresses a rating distortion that has, over time – as capital valuations have continued to fluctuate across land use categories – seen vacant land, commercial and industrial properties paying a rate in the dollar well above residential properties.
“In 2021/22 under the current model, vacant land valued at $500,000 would have been charged $6,430 more than a residential property of the same value and the scenario for commercial and industrial property was also inequitable.
“Our Wakefield 2030 Community Plan includes strategies to develop residential land and grow our economy, with the vision for Wakefield as a great place to do business and a great place to belong. The rate-in-the-dollar distortion posed a potential barrier to our objectives of attracting new businesses, industries and residential developers.”
To further incentivise and attract new businesses and industries, a strategic rate rebate of up to 100% for up to 10 years will also be on offer to encourage investment, facilitate residential development and growth and support the expansion of existing businesses and industries.
Single property ratepayers will also benefit from cushioning of sharp rate increases due to significant valuation changes. A separate cap now applies for individual ratepayers whose annual rate increase exceeds 7% above that year’s general rate rise as set by Council (unless that change was due to property improvement). This is an automatically applied rate cap.
“This newly adopted rating model will be used to calculate the proposed rates for the coming 22/23 financial year, ensuring the model is put into action and benefitting ratepayers as soon as possible,” Mayor Reid said.