Review of Council's Rating method

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Consultation has concluded

The District Council of Yankalilla is considering changing the existing method of rating.

Council is contemplating replacing its minimum rate (which was $850 in 2014/15 and 2015/16) with a fixed charge. If a fixed charge was introduced the amount would be determined at the time Council adopts its 2016/17 budget and would depend on budget proposals and any changes in property values and revenue from other sources. It may be of the order of $200 to $400 per property (single farm enterprises would be treated as one property).

Total rate revenue raised will be unaffected by any change in the method of rating.

Because a fixed charge would apply to all ratepayers the 'rate in the dollar' council levies against each property’s value would fall. Some ratepayers may pay more but this would be offset by others paying less.

Council would also like to reduce the higher differential rate it applies to vacant land. This rate is currently 170% of the rate applied to residential properties. It may also increase slightly the differential rate it applies to primary production properties (currently 91% of the residential rate) so that that rate is closer to the residential rate.

The actual 'rate in the dollar' and relative differential rates will be determined (as is usual) when budget proposals are determined for each new financial year.

The District Council of Yankalilla is considering changing the existing method of rating.

Council is contemplating replacing its minimum rate (which was $850 in 2014/15 and 2015/16) with a fixed charge. If a fixed charge was introduced the amount would be determined at the time Council adopts its 2016/17 budget and would depend on budget proposals and any changes in property values and revenue from other sources. It may be of the order of $200 to $400 per property (single farm enterprises would be treated as one property).

Total rate revenue raised will be unaffected by any change in the method of rating.

Because a fixed charge would apply to all ratepayers the 'rate in the dollar' council levies against each property’s value would fall. Some ratepayers may pay more but this would be offset by others paying less.

Council would also like to reduce the higher differential rate it applies to vacant land. This rate is currently 170% of the rate applied to residential properties. It may also increase slightly the differential rate it applies to primary production properties (currently 91% of the residential rate) so that that rate is closer to the residential rate.

The actual 'rate in the dollar' and relative differential rates will be determined (as is usual) when budget proposals are determined for each new financial year.

Guest Book

Please add your feedback here.

CLOSED: This discussion has concluded.

I strongly oppose the fixed rate concept. Rates in this district are already extremely high. Council should be looking at efficiencies not additional expenditures. The recent branding exercise is an example of poor planning expenditures. The brand exists without a serious strategic plan for implementation.

chris Stokes almost 6 years ago

No Change. This process is a total waste of money, Please give the money that is being wasted on this process to the works department to get on with the job of fixing up our District.
No more talking.
Des Gubbin.

Des Gubbin almost 6 years ago

I have carefully read the Discussion Paper and the pamphlet issued by Council. It seems strange to me the DCY would embark on such a far reaching reform to its rating system with a consultation period during the Christmas/New Year period.
There are clearly winners and losers in any change to a rating system and I do not consider the case for no change has been properly argued in the discussion paper. Indeed it seems that the DCY has already decided that change will occur! I find the analysis unsound with biased comparative data with some Councils that bear no similar attributes when compared to the DCY. There are 3374 residential allotments, 929 primary and 993 vacant allotments. Over 60% of the rates burden are residential allotments. In terms of winners in these proposals it is the vacant allotments whilst residential properties face the prospect of a rate increase in addition to the CPI+ annual increase of up to 5% whilst rates on vacant land will go down. What an absurd proposal.
It would be interesting to see the owner profile of the vacant land as this would reveal the motivation for change - no doubt a developer. It is not as if the rating of vacant land is a secret. It is known to the developer - large or small. It is a cost associated with holding and developing the land and it should not be passed on to the other rate payers of the DCY. Furthermore, if the current market for vacant land is slow well that is just a risk that the developer takes and it is not a risk that the rest of the ratepayers should be required to share.
I strongly oppose the proposed changes. I support the current system.

Theo almost 6 years ago

As I read through the documents associated with the rate review, I find the obfuscation disrespectful. Once deciphered it is clear, the object of a change to a fixed charge will a benefit to property developers, and the wealthy, with no benefit to our community.
This goes against my understanding of good democratic governance.
I cannot support such a change as it would disadvantage those on lower incomes, living in more modest houses.
It is thus not surprising that property developers are being forbidden from making political donations in many places.

Phillip Leane almost 6 years ago

Like others who have commented here, we are also alarmed at the council's proposed changes to the method of calculating rates - especially since the reasons for doing so and the outcomes of those changes are certainly not explained clearly. Council also fails to take into account the 'unintended consequences' of such changes - that of causing more hardship to those who can least afford it. We can only assume from the above information that this is designed as an incentive for land sales in the area & those who own extra land are often the wealthiest people in the district!!

In my discussions with other ratepayers in the area, I have met no-one who agrees with these changes nor anyone who even understands the logic behind the proposed changes. Matters of equity are not addressed adequately, in my opinion - no matter what is stated above. The number of 'conditionals' in the above information - If a fixed charge... may be of the order of... - gives no sense of clarity or certainty to ratepayers. Certainly, at the very least, council needs to make its reasons more transparent & not assume that people will heartily embrace change to their financial circumstances without a more holistic explanation of council's thinking, planning and desired outcomes. If equity is the goal, this is certainly NOT apparent. Given the much lower trust of public officials in the community generally and at all levels of government, one cannot blame the community for being alarmed at these proposals!

The statement 'some ratepayers would pay more but this would be offset by others paying less' is wholly ludicrous in its alleged logic/method of communication. Is this meant to make those who will be paying more feel better about the changes, knowing others will be advantaged, while they get slugged in the hip pocket? In this community, there are many people who may own houses or rural properties, who nevertheless, live near or under the poverty line: single women; people on one income; older people. The idea that they may have to find $200-$400 extra per year is not a comforting thought and will not be alleviated by knowing that others will get a rate reduction!

Again, I remind Yankalilla District Council that the public generally has a great distrust in those who make the decisions which affect their lives - partly because managerial language has taken over from a more descriptive, humane, transparent way of communicating. Be honest and upfront about why the council thinks it needs to do this, its consequences - intended & unintended - as council sees them, and start again trying to communicate more effectively with your community!!

Dr Kathryn Pentecost almost 6 years ago

Council's alarming proposal to alter council rates so that they will no longer reflect property values smells of a nasty scheme to rob the poor in order to give to the rich. Correct me if I'm wrong, but under such an unfair scheme a low income person living in an old shack would pay more in rates so that a comparatively wealthy person owning a two storey mansion can have an even more luxurious life. It is, after all, reasonable to infer that property values reflect comparative wealth - the basis of the fairer existing rates scheme, n'est ce pas? Why alter the existing scheme if it's fairer that the one you propose?

Your proposal is, in principle, the same as suggesting that lower income earners be taxed more and higher income earners less. I suggest, in other words, that this proposal be dumped where it belongs - on the garbage heap along with any other insidious schemes to make life even harder for those already doing it tough. I'm also concerned that there may be vested interests here, e.g. Council members, or influential rich folk owning high value properties who are griping about their high rates(?)

Community members are not gullible fools. Do you seriously think that it is reassuring for us to know that 'some ratepayers may pay more but this would be offset by others paying less'? I, for one, am not prepared to 'pay more' so that someone richer than me can 'pay less'. No doubt everyone else who'd be 'paying more' - i.e. most of the community whose properties are between roughly $200 and $700K - agrees with me.

I suggest Council post a hard copy of their proposal - clearly stating who'd be paying more - to all community members and then see how many of us are against this shamefiul plan.

Maureen Roberts almost 6 years ago

I strongly object to proposed changes to the method of rating as exponentially lower valued properties will pay higher rates. This is inequitable and would penalise those least able to afford a rise in rates to the benefit of developers and higher valued properties. I also object to the timing of this review during the Xmas holiday period.

cheryl sherrah almost 6 years ago

The discussion paper says the council is attempting to adhere to taxation principles-the general principal of taxation is to charge the wealthy more to provide for the poor. This is evident with tax brackets and rates being based on the value of property. Councils proposal is a means to reverse this principal as it will result in increased rates for the low to medium valued properties whilst decreasing rates for high valued property and developers stuck with numerous blocks of land they can't sell. Sorry but this thought bubble is just wrong. Developers should've realised the risks and perhaps priced blocks lower or developed in smaller stages etc etc and I doubt the owners of high value homes are expecting or looking for any reduction in their rates or would be too fussed about a couple hundred dollars either way. It's not councils role to advise a developer and it's certainly not their role to rescue them at the expense of the poor and middle class if they made a bad business decision.

almost 6 years ago

NO to fixed charge. Current rating policy for vacant land should remain the same, with increases in commercial & primary production differential rates.

Denise almost 6 years ago

We have lived in Yankalilla for 4 years. Every year our council rates go up, the cost of the CWMS goes up (why ?), and now we are being asked to comment on a change to the rating system that, a) has been put out over the Xmas period when people are away, occupied with other things etc., b)was not canvassed at the most recent council elections, c) will undoubtedly cost us more and d) doesn't change council revenue ?
Why ?
When council starts talking "equity", I start thinking "vested interest" !
Whose idea is this ?
Who stands to gain, and who stands to lose ?
Are there people on council who stand to benefit ?
Are there bureaucrats who are going to benefit ?
Are there developers who are going to benefit ?
Too many questions, and absolutely NO answers from council, except for a whole lot of numbers, which are, in themselves, deceptive. They might suggest that any increase in rates would be minimal, but that does not take into account the rates increases of 4,5,6,10 (?) % that we will undoubtedly hit with in the coming years.
Our rates are based on a value for our property of $235,000.
What will we pay under the proposed new scheme...whichever option council decides to invoke...because there is no doubt that residents who have more lowly values on their properties will pay more ??!!
The bottom line, to me is, hit the vacant land owners with a big increase in rates, and leave the rest of us alone.
Increased revenue, no angst from the "locals", and maybe more houses will be built !!

grant pettigrew almost 6 years ago

I own a weekend retreat (house) in Second Valley which I don't rent out. I am happy with the current system where we pay rates based on the capital value, which is the fair way to go. All the council proposals and brochures that I have read, I find confusing and don't see the need for change, if rate revenue is unaffected. If you own vacant a house or sell to someone that will. Thanks.

aaronwill about 6 years ago

I have observed (happy to stand corrected) that all this debate is over around 2% of total rates or expressed in terms of expenses it is a similar nominal amount . This has not been recognised in the discussion paper.
Additionally there was a Development Rebate in place for Vacant Land owners that proceeded with the erection of their home between 01/07/14 to 31/12/15 (provided certain steps were undertaken). The rebates were significant (for example if your rates were $1100 or more the rebate was $1000) BUT there is no mention in the discussion papers that this existed or the effectiveness of this program????

arthurrobertson about 6 years ago

The introduction of a base rate with a reduction in rate in the dollar disadvantaged those with lower value properties. No information is presented on rate arrears and which segments are having difficulty paying rates. It is possible that the base rate will force an even higher rate of payment default. The base rate also favours landholders with multiple contiguous titles.
Failure to penalise long term holding of vacant land creates a situation where developers can over produce new lots. With the current State government moves to recue Local Government control of development, this can only exacerbate the problem that has existed in the Yankalilla District for many years, where blocks have been oversupplied and council are not receiving sufficient income from vacant lots to cover depreciation on roads, stormwater and other infrastructure.
There should be no need to discount rates for primary producers, if the capital valuation of this type of land is correct. Failure to place this district’s land under protection from development in the same way that has been done in the Barossa and McLaren Vale regions has created a significant anomaly in valuation of primary production land due to speculation on long term gain through tourist subdivision, especially in coastal regions. Over pricing of primary production land also leads to current land holders reducing production and holding valuable land in a low productive state because new farmers cannot afford to enter the area. It should also be remembered that rates are tax deductible on properties used for commercial gain, resulting in a lower effective impact on disposable income.
Yankalilla District is disadvantaged due to the State government leasing land for commercial operation. This results in no rates being payable as government land does not attract rates.
Undertaking a rate review with the focus on shifting who pays, without a strategic plan to show benefits in the functioning of the community is short sighted and dangerous. It creates an atmosphere of competition between groups of rate payers, in a vacuum of concepts about community cohesion, cooperation and purpose.

Jerry Moller about 6 years ago

I have read all of the documents available and remain confused. The document says that changes to the rating system are to better satisfy equity but nowhere is there an argument of how. It is just an assumption as far as I can see. Thus, I would like to contribute the following:
Why is this being rushed through in the holiday period when many people are away and unable to give it their full consideration?
Where did this originate from? Who proposed this change and does it benefit them?
Why are you looking at changing a system that has only been in place for twelve months?
In terms of equity I note the following two quotes: “Using a fixed charge means that higher valued properties pay relatively less” and “Applying fixed and other charges results in a rate in the dollar being lower than would otherwise be the case. This will typically generate savings for relatively higher valued properties.” Since lower valued properties are more likely to be owned by receivers of lower incomes this means the rich pay proportionately less. Clearly, this is not equitable.
Graph 3.1 means nothing since there are no actual property values are shown on it.
The document says that it “may be hard to defend charging a differential rate on vacant land”. Since this rate is charged on a lower value the total paid is less. Owners of vacant land, some of whom choose to live on their land in holiday periods, have access to all Council services. If the argument is that they use fewer services than residential ratepayers, perhaps this argument should be extended to non-permanent residential ratepayers who have holiday homes in the area and only use services for part of the year, thus not getting the full value of their rates. It is a dangerous argument to relate rates paid to use of services.
I note that, even with vacant land being charged at 170% of the residential rate, vacant land has 19% of the assessments contributing 13% of the rate income whereas residential ratepayers have 61% of the assessments for 60% of the rate income.
All the options modelled show increases for residential ratepayers and industrial ratepayers, but since industrial ratepayers only constitute 0.3% of rates income the burden falls on residential ratepayers. The benefits, on the other hand, significantly favour holders of vacant land, and, according to the discussion paper, those who are lucky enough to own expensive residential properties.
The institution of a fixed charge is reminiscent of the poll tax arguments made by Margaret Thatcher in the U.K., where those least able to pay were to be charged more for the benefit of the rich.

robtidd about 6 years ago

Can someone please advise me:
How many vacant blocks of land within the district have rate arrears?
How many developers of vacant blocks are in the hands of their banks or have had either Administrators or Receivers appointed that are responsible for rate arrears?
Does anyone know what the sold versus residual vacant blocks are for various developments? Eg Original subdivision 50 lots, sold, 39, unsold 11.
That information might give some insight in to the why there has been a lobby by the vacant land holders or their financiers.

arthurrobertson about 6 years ago

I have read the current documents in conjunction with the 2009 discussion paper. The 2009 document states at 7.6 FIXED CHARGE:
"Under this system a fixed amount is first applied evenly against all ratepayers. There is no restriction to the fixed amount and it could be applied so that all ratepayers pay almost the same amount. The remaining amount of rate revenue would be based on the valuation of the property. The effect of a fixed charge is a lower rate in the dollar so the higher valued properties are paying a lower rate in the dollar.
This system would disadvantage owners of lower valued properties and could offend the 'ability to pay' principle. Developers with a number of adjoining blocks will only pay one fixed charge and all the remaining properties will be charged at a lower rate in the dollar. This would be contrary to Councils intention of discouraging the holding of vacant land and ensuring these ratepayers contribute to the surrounding infrastructure.
Estimates show that if this rating system was adopted then 56% of properties would pay more rates and 44% would pay less. The properties paying more would be the lower valued properties and the properties paying less would be higher valued properties and vacant land developments".

Clearly the 2009 proposed structure did not proceed. Do we know why?
The current paper does not provide any insight in to why a Fixed Charge was not applied following the 2009 review and other suggestions were adopted.
What has changed since the 2009 review to gain Councils support for adoption in 2015.
In fact the current paper makes no reference to the 2009 review details. Surely that should have formed part of a preamble to ensure readers were fully informed?

The writer does not object to what is intended in principle BUT has strong views that the case has not been made and neither has a fact based discussion been presented for any interested party to properly consider..

Moreover the document is full of generalisations, assumptions and deficient in the demonstration of the cost benefit to Council. Why go to all this trouble to change a system if there is no gain to be made and only additional cost in undertaking the review?
Why is the review being done now some 6 years after the previous review and consultation and who raised it for consideration?

There are many other areas of the review that in my opinion cast doubt on what is driving the review. Likewise one could go on regarding the deficiencies in the argument.Paragraph four regarding equity is simply padding and is not justified.

I can find no evidence that Council is in any position to determine the Principles of Taxation so far as Vertical and Horizontal Equity goes. For example why should an asset rich Primary Producer be in any different a position to an asset rich but low/fixed income residential property owner (Capping and other forms of relief aside).
I could go on with further points where I find the case shallow but in summary my views are:
The argument has not been made for a change.
Owners of developments should get no relief versus single block owners (ultimate ownership of the property being the test).

I sympathise with Primary Producers, but not all share the same financial situation and not all need rate relief. Equity is the issue given the argument regarding value and services and the quoted Principles of Taxation.
Both the 2009 review and this current review quote the following matters as causing rates to increase (2.3):
New Service demands - well don't do them.
Infrastructure maintenance and replacement - fine
Cost shifting from other levels of Government - stop whatever it was that was propped up.
Imposed new standards - normal business.
Reduction in untied grants - so?
A Fixed Charge might work but the paper through the use of averages has not in my view made the business case regarding who is disadvantaged versus those gaining some relief.
It might have been helpful to the interested reader if the basis of calculating many of the outcomes had been expanded and worked though to conclusion perhaps using the median value point in each category in order for a simple transposition to ones own circumstance which after all is where the Ratepayer Interest sits.
If the intention is to ensure relief is available to those ratepayers less able to pay then that is great BUT at whose cost. If on the other hand it is to satisfy vacant land owners as seems to be the case based on Council minutes then it cannot be justified at the expense of residential homeowners.
Some forward estimates perhaps based on anticipated growth rates of development (those Vacant properties being developed perhaps and some inflation?) would have been useful as well. One would be pretty annoyed to see a jump in overall rate collection in subsequent years with the cost side of the Council remaining under pressure and not aligned to a realistic strategy.
By the way, the same arguments regarding costs and Government withdrawal of funding was made in 2009. What has Council done to mitigate these pressures since 2009.
For example missing from the argument:
- On the basis that subsidies tend to distort markets why do Primary Producers need a positive differential. Are they still in the unfortunate position of 2009? Do they all need relief or just certain sectors? Dairy? Beef? Grain? Are some people not attracting the Vacant Land differential rate whereas at least in part they should be captured.
-Why should "Developers" get any relief given the profit motive, risk acceptance and tax benefits versus a single property owner that might be waiting to retire an then build? Have developers not taken profits up front on lots sold, did not developers know the rating system, have not developers benefitted materially over time by the lowest interest rates in decades. That is why should we the ratepayers pay?
How does Council assess the Principles of Taxation in terms of Capacity to pay?
What services do Vacant Land owners miss out on versus residential property owners and are they really material?
Perhaps the negative differential should be higher reflecting perhaps the costs of a theoretical house construction on site thus clearly aligning with the ultimate purpose of Councils original approval to subdivide and subsequently to have a home erected. Then the issue might be the price set by the developer, as well as location, location and location.

How many holders are there of multiple pieces of vacant land (developers) that will gain from a proposed reduction in the differential rate for vacant land and how many blocks does each hold?
There is no discussion in the papers regarding the changes aligning with Council strategy or business plan?
One might also question why so many blocks of vacant land exist?
How many residentially rated properties are actually B& B's and rated as Commercial?
Until reading the paper I never realised that rates were based on usage as distinct from Zoning. My property is not used for Primary production a point argued with Council at one point over the use of Government Roads and proposed lease charge and therefor I have received the benefit of the differential over at least 6 years and I suspect the previous owner as received the benefit as well.
On the other hand the valuation of my property is very much above its historical value due to our residence being erected. Lower value equals lower rates out of town!!!!!! Notwithstanding this I am wondering how many properties out there have a simple shed structure and no longer conform with the definition of Primary Production (other than for obtaining a tax break). In fact what is Councils definition? Is it the same as the Tax Office?
Perhaps not enough to chase down?
One final comment recognising the above. Our investment property in Hyde Park is valued at more than this property and the rates thereon are around $1300pa less. The perception is that we pay rates down here for perhaps one road grade a year near Christmas and the standard rubbish collection.
Are we getting equal treatment with a town residential ratepayer?

arthurrobertson about 6 years ago

I strongly object to the 'proposed increase the differential rate applied to primary production properties'. If the Council have not notice the decline in 'real' farmers in the Yankalilla Council area, this proposed increase is another 'nail in the coffin' for our struggling farmers and our locally produced food supply.
David Baird
121 Tunkhead Road, Parawa.

DWBaird about 6 years ago

I do not support a reduction in the differential rate levied against vacant residential land within the Yankalila District.

Council is engaging on rating policy review in peak holiday period without providing any rationale for its overall rating policy.

To seek to maintain a revenue neutral approach to decisions regarding one rating category and regarding basic charges is to put the horse before the cart. The notion that one class of ratepayer will be penalised so as to provide relief to another class is poor policy.
Council established a concessional rate in the dollar for land zoned general farming many years ago for a very good reason - farming is the single largest employer and land-use category (by area) in the district and brings with it exposure to environmental and economic sustainability challenges significant to our district's future. To seek to claw-back this situation is to impose higher costs to an already increasingly marginal economic activity. Farming remains tha backbone of this district, even if it contributes a relatively declining share of Council's income. Council exists to serve the greater good of its whole community - not the other way around.

Council established a differential rate significantly greater for vacant residential zoned land than for developed land as a response to the significant level of vacant land-banking evident within the district's townships. A vacant residential block contributor eyes nothing to the local economy and even less to community. WIth almost 1,000 vacant housing blocks within the existing township boundaries, investors are passively relying on the efforts of others to maintain and enhance the value of their idle asset. This is ultimately to the detriment of all land values and therefore also to the operating revenue basis of Council for delivery of services and infrastructure for all stakeholders within the district.

While it is true that vacant residential land investors are not availing themselves of the services that residents receive, the differential rate that was struck was intended to encourage investors to bring forward plans to construct dwellings.

Council needs to grow revenue to maintain services and enhance infrastructure and environmental management. It could better contribute to the development potential of the district by considering a range of pricing measures - to apply both 'carrot and stick'. For example - to encourage the bringing forward of housing construction on existing zoned residential land it could apply a temporary rate rebate (or even moratorium) - say 3 years on new construction so as to signal to investors it is serious about some level of population growth to support local job creation and business sustainability.

Likewise, Council currently derives only around $100,000 per annum in rate income against property zoned commercial. What kind of positive impact on employment and business sustainability might a 5-year rate holiday achieve to boosting business investment and confidence? Especially if this saving was mandated to be passed on to commercial property tenants who provide services and jobs!

It should also be recognised that a significant proportion of existing residential dwellings are being operated as negatively-geared enterprises by their owners. As such they claim their annual rates as a tax-deductible expense while deriving commercial gain. As such, why can they not be charged a differential rate to that levied against either owner-occupier residential or purely private weekend/recreational residential ratepayers?
I support the retention of the existing rate on vacant residential land but recommend that Council also adopt incentive measures and then effectively communicate to stakeholders so that people understand that the status quo is a recipe for regional decline and that growth is essential simply to achive viability and sustainability in our part of the Fleurieu Peninsula.

gregmackie about 6 years ago

"The amount of revenue collected will not change". It appears that the primary producer and the permanent residents will pay more if this plan is adopted. Most of the vacant land is held by people who live outside the district or by developers, and that land does not have the associated costs of water and electricity. Farmers are doing it tough enough without the Council trying to shift the burden for no good and fair reason and pensioners have lost the rates concession. The present syatem was enacted for good reason and must not be tampered with. I am strongly against this change, and if it is implemented, the next Council team will have the job of fixing it.

robin about 6 years ago

the option about having a waste services charge does that include sewage if so i will not be paying it as i live out of town and have to look after my own sewage as not hooked into the waste line i don't even think it comes to where i live

homeowner about 6 years ago