CITY OF GREATER GEELONG 2012-2013 Rating StRategy

Deferral of Rates - LGA Section 170
The option to defer rates is a legislative provision – LGA Section 170.
Council has determined that the deferral of rates be extended to include both residential and non-investment
vacant land ratepayers.
Promotion of this option will occur on the rate notice, rate brochures and web site.
There is a misconception that by deferring rates Council would eventually “own the property” by way of
accumulated debt. This is not so. By way of example, current average rates approximate 0.3% of the capital
value of the property. Based on the average residential rates and the actual CIV changes and rate increases
over the past 10 years, even after 10 years of accumulated rate deferral (with interest rate at 7%), the value
of rates deferred still only approximated 5% of the properties capital value.
CIV 000's
Deferral of Rates as proportion of Property CIV 2004-2014
400
350
300
250
200
150
100
50
0
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Estimated Residential CIV Cumulated Rates & Interest @ 6.85%
Council has established guidelines and an application form for ratepayers wishing to apply for deferral or
waiver of rates.
If Council is satisfied on the application of a ratepayer that payment of rates in accordance with the Act would
cause hardship, the Council may:
Defer payment or part payment for such period as Council thinks fit.
The deferral will be granted on the following conditions:
That the ratepayer pay interest on the amount affected by the deferral at a rate fixed by Council.
The deferral ceases if Council in its discretion revokes the deferral (in which case Council must give the
ratepayer at least 30 days notice in writing of the revocation before taking action to recover rates affected
by the deferral);
The ratepayer ceases to own or occupy the land in respect of which rates are imposed (in which case the
rates are immediately payable); and
Any other conditions as Council thinks fit.
The application for deferral does not change the due date for payment of rates.
Policy Statement: Council policy is that deferral is appropriate where ratepayers have incurred increases to
rates and immediate affordability is an issue.
Reason for Policy: Where application for waiver of rates causing hardship is based on the premise of
significant increases to capital value, short-term rates assistance measures are available based on eligibility.
Beyond the rates assistance measures Council believes that in such cases deferral of rates is more
appropriate. Waiver should be considered only for those in genuine hardship and where little capital gain or
future benefit can be demonstrated. To provide additional waiver to ratepayers experiencing significant
capital appreciation in property values would result in a redistribution of rates back to lower valued properties
– in effect regressive taxation, which is inequitable.
Rating Strategy 2012-2013 Page 45