South Burnett Mayor Brett Otto said Council have adopted a three-year land valuation averaging system. (Picture: File)
South Burnett Mayor Brett Otto said Council have adopted a three-year land valuation averaging system. (Picture: File)

Why you might be paying more than your neighbour in rates

THE South Burnett Regional Council has adopted the 2020/21 budget, which features a historic zero per cent rate increase.

Despite the rate freeze, Mayor Brett Otto said it’s important residents understand there may still be some changes in rate charges.

“Council recognises some property owners will face significant increases in general rates as their property value has increased,” Cr Otto said.

“It’s important to note some rate payers general rates will increase while others will decrease based on land valuation.

“Council will however receive no initial income from rates.”

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Council has adopted a 3-year valuation averaging as a means of phasing in the large land valuation increases experienced by some properties due to the land revaluation.

Council uses the 3-year averaged valuation to calculate the amount of general rates.

For example, if a property value was $48,000 in 2017/18 and rose to $72,000 in 2019, instead of paying rates using the current valuation ($72,000), it would be averaged over three years.

The rate charges are worked out by adding the current year valuation with the previous year valuation and the two year previous valuation divided by three.

Instead of paying rates using the valuation of $72,000, you would pay them using the average, which would be $56,000.

The same formula applies year after year for the three year averaging period.

Scenario Example

Effect Date Land Valuation Average Valuation

30/06/2017 48,000 48,000 2017/18 Financial Year

30/06/2018 48,000 48,000 2018/19 Financial Year

30/06/2019 72,000 56,000 2019/20 Financial Year

30/06/2020 72,000 64,000 2020/21 Financial Year

30/06/2021 72,000 72,000 2021/22 Financial Year

When the total revenue for a rate category from last financial year is divided by the rate category valuation total, the resulting rate in the dollar will decrease.

This will allow some ratepayers general rates for 2020/21 to decrease – properties not affected by averaging where the valuation remains the same.

This is because the rate in the dollar has decreased.

Some properties, despite the lower rate in the dollar, will pay the same as 2019/20, as they are charged the minimum rate for that rate category.

Minimum rates remain the same as last year.

While there is a zero per cent increase in Council’s general rate revenue, the individual circumstances and contribution of each rate payer will be very different.