Changes to your rates
From 1 July 2021 we will be introducing a new rating scheme for everyone in Bayside.
This may be introduced gradually if the NSW government amends legislation before 1 July 2021.
The new scheme will redistribute the way we collect revenue from rates. Everyone's rates will be calculated using the same formula, with the amount you pay based on the value of your land and classification.
NSW government considering changes to allow gradual implementation
In December 2020 the NSW government proposed several changes to the way Councils calculate and collect rates. These changes are contained in a draft Bill that has been released for consultation.
One of the proposed changes will allow Councils to implement rates harmonisation gradually, over a period of up to four years.
We expect the NSW government to consider the bill before the end of the financial year, in time to adjust our rating scheme from 1 July 2021.
Under current legislation the NSW State Government has given all amalgamated Councils, including Bayside, until July 2021 to harmonise their rating structures.
This means that from July 2021, your rates will be calculated under a single formula that collects rates fairly across all Bayside ratepayers. This may be introduced gradually if the NSW government passes legislation changes before 1 July 2021.
This change does not increase the total rate revenue received by Bayside Council. Rate harmonisation simply redistributes how the rates are currently paid so they are paid equally across all ratepayers based on the unimproved land value of their property.
Once implemented, regardless of what former Council your property is located in, all Bayside ratepayers will pay the same for their rates depending on the value of their land.
The rates calculator will show you how your rates will change.
Why we are making this change
The NSW State Government imposed a rates freeze on amalgamated Councils in 2016, ensuring ratepayers paid no more than they would have under their old Council until 2021.
Your rates are currently calculated using the formulas devised by the former Rockdale City and City of Botany Bay Councils.
This means if the NSW Valuer General has valued your property at $750,000 in Arncliffe, you pay a different amount to the owner of a property valued at $750,000 in Mascot, despite receiving the same services.
In preparation for a new scheme from 1 July 2021, we are required to submit an application for a new minimum rate to the Independant Pricing and Regulatory Tribunal NSW (IPART).
You can view and comment on this application on the IPART website. The consultation period ends on 21 March 2021.
On 14 October 2020, Bayside Council resolved to consult the community on rate harmonisation as currently mandated by the NSW State Government, but made provision for a gradual (multi-year) implementation should the current legislation be amended prior to July 2021.
This consultation included:
- regular updates through our website, social media and print material
- a letter to all residential ratepayers detailing the change
- a dedicated webpage with frequently asked questions and reference material
- a rates calculator, which demonstrated the impact of the change on your rates
- an online survey.
Present options to Council
9th September 2020
14th October 2020
Community consultation commences
15th October - 31st December 2020
|4||Report to Council on the outcomes from consultation||10 February 2021|
|6||Legislation considered by NSW parliament||April 2021|
NSW government to consider new bill
|8||IPART decision on new minimum rate||May 2021|
|9||New scheme to take effect||1 July 2021|
The changes in detail
Bayside Council is consulting with the community on the following rate harmonisation structure:
- The rating categories and sub-categories to be established are:
- Residential - Ordinary
- Business - Ordinary
- Business - Industrial
- Business - Port Botany
- Business - Mall
- A minimum rate will be applied across all rating categories and sub-categories. This will be $768.52 (plus the IPART rate pegging limit of 2% for the 2021/22 financial year)
- The existing special rates (approximately $13 million) levied across the former Rockdale City Council will remain unchanged and will not be levied across the former City of Botany Bay Council area.
Frequently asked questions
Council rates are a property tax and are a source of Council revenue. Rates are used to provide essential infrastructure and services.
This includes footpaths, resealing roads, and stormwater drainage as well as community facilities (parks, gardens, libraries and pools).
Rate harmonisation is a process where we move to a single rates system that uses the same method to calculate rates across the Bayside local government area.
Council is required to create one general rating structure as a result of the amalgamation that created Bayside Council in 2016.
Under current legislation, the NSW state government has given Council a deadline of 1 July 2021 to have one rating structure in place. We may be able to offer a gradual implementation if the NSW government's proposed changes are passed into law.
It means that all ratepayers across the Bayside LGA will be subject to the same minimum rate of $768.52 (plus the IPART rate pegging limit of 2% for the 2021/22 financial year) as well as their rates being calculated using the same formula.
Not everyone will pay the same rates for their property as rates are calculated using the unimproved land value as decided by the NSW Valuer General. All properties have different land values. The formula to calculate rates will be the same across all rating categories.
This process will remove inequity in the scheme by applying a consistent formula for calculating rates across the all Bayside ratepayers.
Rate Harmonisation will see some rates increase and some decrease.
Remember, there are other factors that affect the rates calculation, including:
- yearly increases in line with the rates peg
- your land valuation, which is assessed every 3 years by the NSW Valuer General. The most recent valuation was this year and will be applied in the 2020/21 financial year.
You can see the impact of the proposed changes on your rates by using the rates calculator.
Land values are one factor used by Council in the calculation of a landowner's rating liability. Increases in land values do not necessarily lead to similar increases in rates. Changes to land valuations do cause a redistribution of the rates levied across categorised properties, but individual rates may not go up and down in line with the property value.
If you are experiencing hardship and receiving Australian Government payments, you may be eligible for a rates deferral or payment arrangement.
Each Council in NSW is able to determine their own minimum rate.
The former Botany Council has a minimum of $552.62 while the former Rockdale Council has a minimum of $768.52.
The former Botany Council minimum was much lower due to the residential rates being subsidised by the business rates.
The NSW State Government has given all Councils in NSW a deadline of 1 July 2021 to have one rating structure in place. This means one minimum rate across the whole of Bayside Council. Under the NSW Government guidance there needs to be a fair and equitable split of rates across both residential and business rate payers.
This would mean we would collect $28 million less in rates revenue each year.
This would have a big impact on our ability to deliver services. This could also affect the standard of maintenance and the quality of facilities we provide including parks, open space and sporting facilities.
Why do the former Rockdale rate payers still pay a special rate levy on top of their rates and Botany do not?
Prior to amalgamation the former Rockdale Council applied for a special rate variation so that they could afford to upgrade and mainten the infrastructure across Rockdale.
As part of the amalgamation, we were able to continue the special rate levy solely for Rockdale ratepayers.
Botany ratepayers did not have a special rate levy for infrastructure assets attached to their rates and will not be required to pay the Rockdale special rate as part of rates harmonisation.
Council rates that are above the minimum are calculated based on the value of your land, as determined by the NSW Valuer General.
The valuation process is not determined by Council.
We receive the updated land values from the NSW Valuer General at least every three years. The last revaluation came into effect on 1 July 2020. Any significant fluctuation in your land valuations may have an impact on the amount of rates you pay.
You can find further information about the NSW Valuer General valuation process on their website.
Generally, businesses pay a higher rate across the Bayside local government area than residential rate payers.
For those businesses that pay the minimum rate they are paying the same as residents who pay the minimum rate.
Since the amalgamation of Rockdale and Botany Councils in 2016, we have been required to maintain two rating systems. We must create one consistent rating system by 1 July 2021 to ensure a fairer approach for all ratepayers, regardless of dwelling or business type.
The former Botany Council had a minimum of $552.62 while former Rockdale Council had a minimum of $768.52. The former Botany Council minimum was much lower due to the residential rates being subsidised by the business rates.
To ensure equity in the rates and annual charges across the Council LGA a harmonised and equity based minimum rate and rate in the dollar is being proposed, with a new residential minimum rate of $768.52.
Overall, we won't be collecting any additional revenue through this process.
We use the method of 'ad valorem' (rate per dollar according to land value) and minimum rates to determine what rates are paid by each property owner.
The rate per dollar calculation uses the land's valuation. If the valuation multiplied by the rate per dollar falls below the minimum rate, a minimum rate will be charged.
Because units, flats and apartments own just a small portion of a lot of land, the calculated rate is usually below the minimum. Therefore they pay the minimum.
Minimums are used to reduce the gap between what houses and apartments pay in rates.
The value of your land is determined by the NSW Valuer General. We receive the updated land values from the NSW Valuer General at least every three years. The last revaluation came into effect on 1 July 2020. Any significant fluctuation in your land valuations may have an impact on the amount of rates you pay.
You can find further information about the NSW Valuer General valuation process on their website.
Botany ratepayers currently have a lower minimum rate compared to Rockdale minimum ratepayers.
Currently ratepayers in the former Botany Council area pay a minimum rate of $552.62.
Ratepayers in the former Rockdale Council area pay a minimum rate of $768.52.
To provide greater fairness and consistency we are proposing a consistent minimum rate of $768.52, which would come into effect from 1 July 2021. This may be introduced gradually if the NSW government passes legislation changes before 1 July 2021.
This would mean that everyone in Bayside who pays the minimum rate will have their rates calculated the same way.
These are a specific type of rate, where a minimum amount is levied on each parcel of land, regardless of land value.
This mostly applies to apartments, as these dwelling share the land value and therefore would pay a substantially lower rate to that of houses. Therefore Councils set minimum rate to reduce the gap between what houses and apartments pay in their Local Government Areas.
Councils must apply to IPART for increases to the minimum rate.
Yes, residents who hold a pensioner concession card are entitled to apply for a rate reduction and will receive the Mandatory Government Rebate of $250.