CITY OF GREATER GEELONG 2012-2013 Rating StRategy

Reasons for Differential Rates Policy:
The application of the rating strategy should be simple, efficient, and include a mechanism that contains
principles of public benefit taxation.
While general rates are not a user pay mechanism, elements of the rating strategy will embrace the user
pays principle where practicable. Council may consider the imposition of specific costs that may warrant the
striking of new or higher differentials.
Rating must ensure that there is sufficient funding to meet the cost of providing and maintaining
infrastructure assets and services for the benefit of current and future communities.
The City of Greater Geelong applies a capital improved valuation (C.I.V.) method to all properties within the
municipality to take into account the full development value of the property. This method is applied
irrespective of whether the property is subject to rates or exempt under legislation. Council recognises that
people with higher value properties generally have higher wealth and a greater ability to meet the provision
of Council services.
Rating, through the application of higher differentials recognises the ability of some ratepayers to obtain
concessions from the tax deductibility of Council rates and provides for a series of differential rates. This
takes into account low economic return to large landholdings, avoid distortions in the market or an ability to
contribute above the standard charge.
Rating shall endeavour to promote and encourage economic development throughout the municipality.
The farm differential is to recognise the benefits of large holdings, open space and traditionally, generally
less demand upon Council services per land area held. Council has used a combination of a differential tariff
and a LGA Section 169 rebate in order to maintain the status of farms as the lowest rated tariff group.
Vacant Land is rated at a higher rate in the dollar than residential land to encourage the development of the
land.
To promote equity in rating, a "Municipal Charge" may be used, or where appropriate an ex-gratia amount
may be negotiated.
Differential Tariff Groups
The Local Government Act allows Councils to “differentiate” rates based on the use of the land, the
geographic locality of the land or the use and locality of the land.
Policy Statement: Council has determined that the following differential tariff groups based on land use
characteristics and geographical area are appropriate for rating purposes.
Reason for Policy: Council has a diverse mix of geographically located and land use properties. Valuation
methodology is not consistent between differing land use property types and the establishment of differential
tariff groups ensures greater equity and contribution from rates according to land use characteristics in
relation to affordability and taxation principles. Council has also introduced a geographic rate to ensure that
the land defined as the Point makes a contribution to the management of the environmentally sensitive land.
Rating Differentials
In accordance with LGA section 161 Council is required:
to specify the objectives of the differential rate;
to define the types and classes of land and a statement of reasons for the use and level of that rate; and
to identify the types and classes of land in respect to uses, geographic location, planning scheme zoning,
building types and any other relevant criteria.
The purpose is to ensure that Council has a sound basis on which to develop the various charging features
when determining its revenue strategies and ensure that these are consistent with the provisions of the Local
Government Act.
Rating Strategy 2012-2013 Page 25