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Do we pay the highest rates in Australia?

By Kim Huynh - 29 September 2016 39

Tom Chen and Kim Huynh do a fact check on residential rates in the ACT.

With the Liberal Party claiming that our rates are skyrocketing, excessive and unfair, you would be excused for thinking that we pay the highest rates in the country or soon will.

In fact, this view has been expressed to us on the campaign trail and in response to our RiotACT assessment of light rail. We decided to find out if it’s true.

Overall, our analysis shows that:

  1. There are jurisdictions in Australia that charge residents significantly more than the ACT.
  2. The rate of increase in the past few years and as projected over the next few years is high, but not as dramatic as the Liberal Party would like us to be believe.
  3. When you look at all the state and council level taxes together, Canberra residents pay per capita less than the national average.

How do our rates stack up?

Unfortunately, there’s no central information source for Australian council rates and the degree of transparency varies significantly among councils.

Earlier this year The New Daily identified the 10 highest rate charging councils in Australia. The Gold Coast City Council topped the list with the City of Hobart closely behind. Their investigation apparently missed or excluded the ACT. And there were few details on how they came up with their figures.

So we developed our own approach and applied it to ACT rates for 2016/17.

Our analysis shows that residents in the Gold Coast and Hobart pay significantly higher residential rates than we in the ACT. Yass property owners also pay higher rates, something buyers interested in the Ginninderry development, which straddles West Belconnen and Yass, should keep in mind when selecting their block.

1

But aren’t our rates skyrocketing?

At the previous ACT election, critics of the government argued that its proposed taxes would increase our rates dramatically. The chart below shows the rates payable for a property with an assessed land value of $350,000 (see GoKimbo for full details of our methodology).

From 2012/13 to 2016/17 the annual rate charge for this property increased from $1,548 to $2,001. This represents an average annual increase of 6.6% pa, which is much higher than inflation and average wages growth, but not astronomical.

Of course rates paid by individual property owners will also be determined by changes in land value. But these increases aren’t directly determined by the ACT government.

What is determined by the government is that the ACT is one of the few Australian jurisdictions where rates are structured progressively. This means that like income tax, higher value residential properties pay higher marginal rates.

We support this approach because it gives less wealthy land owners a fair go.

2

What about all the other fees and charges?

A more complete measure of taxation needs to include not just rates, but also other charges including business rates, registration costs, usage fees, levies and duties. Moreover, because the ACT government operates as both a state and a local council it’s important take into account taxes such as payroll tax and stamp duty.

ACT Treasury has done this analysis and provides the results in the Fiscal Strategy document released as part of this year’s budget. Using 2014/15 tax and population data from the ABS, the analysis shows that during 2014/15 we each paid approximately $3,500 in state and local council level payments.

This is lower than the national average of $3,750. WA topped the list at over $4,100 per person. Tasmanians enjoy the lowest level of taxes at $2,700 per person, which shows the importance of looking at the whole picture given that Hobart Council placed second on The New Daily’s list of highest charging councils.

There’s no doubt that rates rises can affect the cost of living, especially for people whose property value has increased much faster than their income. Retirees can be particularly at risk.

It doesn’t help the economically vulnerable to know that others are paying more. However, alarmist claims about exploding rates only obfuscate the problem. It’s important to realise exactly why we’re feeling the pinch if we’re to have any hope of relieving the pain.

How do you rate the ACT when it comes to rates and taxes? Will rates affect how you will vote in the upcoming election? Do you believe that rates would be substantially lower under a Liberal government?

Tom Chen works as a research officer at the Australian National University and believes that people are capable of making the right choices when presented with the right information. Kim Huynh is a RiotACT columnist and is also running as an independent for Ginninderra in the ACT election. Check him out on Facebook at gokimbo or GoKimbo.com.au

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39 Responses to
Do we pay the highest rates in Australia?
Acton 10:26 pm 29 Sep 16

The question you should be asking is, ‘Have we had the highest rates increases in Australia?’

The table in the following link shows that average residential rates for houses in the ACT were $1,406 in 2011-12 and $2,152 (with reform) in 2016-17. That is a 53% increase over five years.

Look at South Canberra – a 73.8% increase!!!

http://apps.treasury.act.gov.au/budget/budget-2016-2017/budget-booklets/taxreform/changes-in-residential-general-rates-to-date-for-houses-And-units

There is no doubt that residential rates under ACT Labor have increased far in excess of wages growth, interest rates, inflation and will keep on increasing:

http://www.canberratimes.com.au/act-news/many-canberra-householders-paying-rates-bills-60-per-cent-higher-than-four-years-ago-20150603-ghfn1v

Can you find anywhere else in Australia where rates have increased on average 50-60% over the last five years?

Would voters anywhere else tolerate such inequity?

aussie2 9:35 pm 29 Sep 16

This is great work by the team. What worries me is the issue of the tram or light rail. I went to the first Corbell inspired where Prof Nicholson told us how “urban uplift ” or rate increases would fund the initiative. However, that means someone is paying higher rates to pay for the tram. Secondly, patronage for the past 28 years has been exceptionally poor, in part because of the way we are laid out. No real face to face engagement to find out the evidence of why they are over public transport. I don’t actually believe replacing buses with trams will radically change people’s habits. There has been real belt tightening by our current government over recent years and now they want to spend their way to Victory. Sorry but the voters are not that stupid Mr Barr. Besides, had you said to the electorate I will run a referendum and if successful I will run the tram-most people would be happy with that. But that did not happen and we are about to be screwed with a Canberra wide network white elephant we will all pay for but few use, in part by increased rates of $65000 per household. I would be very, very worried if that happens. Don’t tell me you haven’t been warned!
Russ for Canberra Public Transport Alliance

Masquara 7:26 pm 29 Sep 16

From $30 a week to $78 a week in a matter of a few years IS dramatic, thanks. And that’s without water rates!

rommeldog56 6:56 pm 29 Sep 16

Kim Huynh said :

….. the point that we make in the last part of the article is that they should be viewed/endured/suffered in a broader taxation context. And while it may well be a long and hard slog, I hope you agree that the more discussions of this type that we have, the more chance there is of relieving all sorts of pain. K

What on earth are u talking about. “discussions” will not relieve anything.

And yes, apartment dwellers will probably not notice yet because if they are renting, the increase in Annual Rates of avg.17% for 2016-17 announced by the ACT Labor/Greens Govt may not be being reflected in rentals yet – until the rental agreement comes up for renewal.

Kim Huynh 6:41 pm 29 Sep 16

HiddenDragon said :

“It’s important to realise exactly why we’re feeling the pinch if we’re to have any hope of relieving the pain.”

That (“relieving the pain”) is not going to happen. Even before the daily dose of election campaign promises started, the money from rapidly rising rates has already been committed, and then some.

A good indication of this is the decision, announced in this year’s ACT Budget, that “From 1 July 2017, the Government will change the general rates calculation for multi-unit dwellings to base it on the total AUV of the land rather than the individual AUV of the unit (consistent with changes to Land Tax). This change, to be phased in over two years, will establish greater equity in general rates paid between houses and units.” [ACT Budget Paper No.3, 2016-17]

In other words, an “inequity” was dealt with by increasing rates for those perceived to be undercharged, not the other way around. No one who has taken even a passing interest in these matters could be surprised by this, or should be surprised by what is waiting down the track for ACT rate payers.

Thanks for raising rising apartment and unit rates HD. I’ve been speaking to Belco residents of multi-unit dwellings and am conscious of that point. Will see if we can do another article on that. Obviously, residential rate are going to rise in the short and intermediate term, but the point that we make in the last part of the article is that they should be viewed/endured/suffered in a broader taxation context. And while it may well be a long and hard slog, I hope you agree that the more discussions of this type that we have, the more chance there is of relieving all sorts of pain. K

Masquara 6:14 pm 29 Sep 16

How does comparing Canberra’s rates average with the average in the most expensive residential zone in the Gold Coast add to the conversation?

HiddenDragon 5:35 pm 29 Sep 16

“It’s important to realise exactly why we’re feeling the pinch if we’re to have any hope of relieving the pain.”

That (“relieving the pain”) is not going to happen. Even before the daily dose of election campaign promises started, the money from rapidly rising rates has already been committed, and then some.

A good indication of this is the decision, announced in this year’s ACT Budget, that “From 1 July 2017, the Government will change the general rates calculation for multi-unit dwellings to base it on the total AUV of the land rather than the individual AUV of the unit (consistent with changes to Land Tax). This change, to be phased in over two years, will establish greater equity in general rates paid between houses and units.” [ACT Budget Paper No.3, 2016-17]

In other words, an “inequity” was dealt with by increasing rates for those perceived to be undercharged, not the other way around. No one who has taken even a passing interest in these matters could be surprised by this, or should be surprised by what is waiting down the track for ACT rate payers.

bj_ACT 5:22 pm 29 Sep 16

This is good to see some effort to undertake some analysis into ACT Land rates, but I think you have missed a number of key data sources and I wouldn’t use the Fiscal strategy document quite the way you have. I only did a quick indicative mix of 19 Tuggeranong suburbs and 18 Inner Suburbs from ACT Hansard – Below is each suburbs average Rates by Year and then further below an annual % increase by year. You will see the average Rates increases are closer to double your 6.6% findings and are roughly match what was reported in the Canberra times on a number of occasions.

Before the new Rates Policy the average increase was 4% per annum. BUT The key data is that following the change to rates charges the average Increases for my subset of suburbs was Year 1 – 15% Year 2 – 9% Year 3 – 10% Year 3 – 10% (I believe the ACT government announced that this would drop back to a 6% average this Election year).

I hope this data formats OK

Avg Rates 09-10 10-11 11-12 12-13 13-14 14-15 15-16
LYNEHAM $1,438 $1,467 $1,511 $1,717 $1,907 $2,106 $2,309
DICKSON $1,419 $1,481 $1,569 $1,862 $2,033 $2,240 $2,462
O’CONNOR $1,859 $1,904 $1,933 $2,353 $2,530 $2,823 $3,120
AINSLIE $1,725 $1,800 $1,876 $2,305 $2,505 $2,756 $3,041
TURNER $2,327 $2,301 $2,332 $2,996 $3,306 $3,751 $4,222
BRADDON $1,988 $2,001 $2,037 $2,503 $2,733 $3,001 $3,303
REID $2,564 $2,470 $2,473 $3,183 $3,459 $3,840 $4,222
CAMPBELL $2,210 $2,193 $2,216 $2,624 $2,990 $3,287 $3,621
DOWNER $1,454 $1,485 $1,528 $1,741 $1,929 $2,169 $2,446
WATSON $1,383 $1,430 $1,481 $1,660 $1,786 $1,986 $2,192
HACKETT $1,519 $1,554 $1,620 $1,913 $2,109 $2,334 $2,565
YARRALUM $2,661 $2,617 $2,584 $3,313 $3,548 $3,949 $4,366
BARTON $3,149 $3,098 $3,003 $3,896 $4,098 $4,563 $5,040
DEAKIN $2,458 $2,476 $2,471 $3,135 $3,355 $3,723 $4,046
FORREST $4,813 $4,757 $4,701 $6,486 $6,793 $7,478 $8,226
KINGSTON $1,789 $1,765 $1,779 $2,126 $2,323 $2,611 $2,917
NARRABUN $1,741 $1,796 $1,834 $2,198 $2,392 $2,635 $2,858
GRIFFITH $2,673 $2,676 $2,659 $3,440 $3,674 $4,086 $4,433
KAMBAH $1,118 $1,173 $1,229 $1,332 $1,458 $1,600 $1,744
WANNIASA $1,146 $1,230 $1,296 $1,413 $1,537 $1,694 $1,836
MONASH $1,124 $1,204 $1,265 $1,365 $1,486 $1,637 $1,789
GOWRIE $1,035 $1,101 $1,167 $1,246 $1,368 $1,505 $1,644
FADDEN $1,177 $1,276 $1,364 $1,522 $1,666 $1,805 $1,938
MACARTHR $1,131 $1,207 $1,278 $1,395 $1,524 $1,671 $1,813
RICHARDSN $1,014 $1,086 $1,151 $1,224 $1,343 $1,478 $1,606
GILMORE $1,048 $1,131 $1,207 $1,287 $1,427 $1,570 $1,715
CHISHOLM $1,060 $1,161 $1,251 $1,355 $1,484 $1,609 $1,728
THEODORE $1,046 $1,104 $1,162 $1,241 $1,356 $1,486 $1,605
CALWELL $1,068 $1,145 $1,214 $1,301 $1,431 $1,580 $1,723
ISABELLA P $1,007 $1,080 $1,145 $1,220 $1,339 $1,471 $1,602
CONDER $1,079 $1,151 $1,205 $1,277 $1,387 $1,503 $1,623
BANKS $1,024 $1,116 $1,189 $1,264 $1,381 $1,507 $1,623
GREENWAY $1,052 $1,086 $1,135 $1,197 $1,315 $1,439 $1,771
GORDON $1,062 $1,123 $1,188 $1,254 $1,390 $1,522 $1,645
BONYTHON $1,063 $1,152 $1,217 $1,289 $1,403 $1,546 $1,686
OXLEY $1,121 $1,203 $1,277 $1,395 $1,529 $1,659 $1,790
THARWA $1,083 $1,066 $1,073 $1,086 $1,206 $1,328 $1,490

% Inc to Yr 2011, 12, 13, 14, 15, 2016
LYNEHAM 2% 3% 14% 11% 10% 10%
DICKSON 4% 6% 19% 9% 10% 10%
O’CONNOR 2% 2% 22% 8% 12% 11%
AINSLIE 4% 4% 23% 9% 10% 10%
TURNER -1% 1% 28% 10% 13% 13%
BRADDON 1% 2% 23% 9% 10% 10%
REID -4% 0% 29% 9% 11% 10%
CAMPBELL -1% 1% 18% 14% 10% 10%
DOWNER 2% 3% 14% 11% 12% 13%
WATSON 3% 4% 12% 8% 11% 10%
HACKETT 2% 4% 18% 10% 11% 10%
YARRALUM -2% -1% 28% 7% 11% 11%
BARTON -2% -3% 30% 5% 11% 10%
DEAKIN 1% 0% 27% 7% 11% 9%
FORREST -1% -1% 38% 5% 10% 10%
KINGSTON -1% 1% 20% 9% 12% 12%
NARRABUN 3% 2% 20% 9% 10% 8%
GRIFFITH 0% -1% 29% 7% 11% 8%
KAMBAH 5% 5% 8% 9% 10% 9%
WANNIASA 7% 5% 9% 9% 10% 8%
MONASH 7% 5% 8% 9% 10% 9%
GOWRIE 6% 6% 7% 10% 10% 9%
FADDEN 8% 7% 12% 9% 8% 7%
MACARTHR 7% 6% 9% 9% 10% 8%
RICHARDSN 7% 6% 6% 10% 10% 9%
GILMORE 8% 7% 7% 11% 10% 9%
CHISHOLM 10% 8% 8% 10% 8% 7%
THEODORE 6% 5% 7% 9% 10% 8%
CALWELL 7% 6% 7% 10% 10% 9%
ISABELLA P 7% 6% 7% 10% 10% 9%
CONDER 7% 5% 6% 9% 8% 8%
BANKS 9% 7% 6% 9% 9% 8%
GREENWAY 3% 5% 5% 10% 9% 23%
GORDON 6% 6% 6% 11% 9% 8%
BONYTHON 8% 6% 6% 9% 10% 9%
OXLEY 7% 6% 9% 10% 9% 8%
THARWA -2% 1% 1% 11% 10% 12%

Kim Huynh 5:04 pm 29 Sep 16

Garfield said :

There are some massive holes in your methodology there, but let’s start with something irrefutable.

Before the rises started, rates for my property were about $1500 while my latest rates bill is $2400. That’s a 60% increase and way over your supposed increase of only 6.6% p.a. There are other people I’ve talked to whose rates have increased even more than mine have, and from what I can tell my increases have probably been less than the average.

Now to methodology problems.

1. You’ve started with the 12/13 figures as the base year, but you should be using 11/12 as 12/13 was the first year to which the current process was applied, and the increase in that first year was significant.
2. Land value is not a constant figure, but tends to increase over time. For example the government tells me my block of land increased 9% from the last valuation to this one. For you to use a constant value of $350,000 across all years is significantly understating the level of increases.
3. Land values differ between cities, so you need to use the value of an average block in the different cities, not a constant valuation.
4. Hobart City Council is literally the inner part of Hobart, with other councils such as Glenorchy, Clarence, Brighton & Kingborough effectively forming part of greater Hobart. In comparing Hobart rates to ACT rates you should be looking at the rates levied in the inner city, ignoring Tuggers, Belco etc, or you need to somehow factor in the rates payable in the surrounding Tasmanian councils. Using some Allhomes stats for example, an average house in Yarralumla probably has rates of around $6000 p.a. while an average house in Lyneham might be around $2800.
5. Looking at the way Yass has structured their rates, the only way you came to the figure you’ve listed above for residential properties is to include council charges for water & sewerage, which in the ACT are an additional separate charge.

Thanks for the comments and for contributing to this hot topic (which I stress we come to in good faith, impartially and imperfectly). Tom and my responses and a revision are as follows. We’ll follow Garfield’s comment which is usefully set out in 5 points.

I feel your pain Garfield. My rates have also gone up by more than 6.6% p.a. and I too have mates who complain no end about rates. But my personal experiences – irrefutable as they may be – don’t form the basis for our/my analysis.
1. We’re not directly assessing the impact of current tax reforms, but rather that view that rates have risen astronomically. 2012/13 was the furthest back that the ACT rates calculator tool is available (http://www.revenue.act.gov.au/calculators/rates-fesl-and-land-tax-2012-13). We’re happy for you or anyone out there to do the sums from 2011/12 and/or assess the impact of the ALP tax reforms.
2. The change in a property’s rates is dependent on the rates structure and the land value. The government doesn’t directly determine land values. Our approach is designed to remove the impact of land value changes so that it fairly assesses the impact of the changes in the rates.
3. Once again, we wanted to remove the effects of different land valuations between jurisdictions. However, we recognise the limitation of cross city comparisons using this approach. Therefore, we have not included councils such as Melbourne and Sydney as they would have much higher land values.
4. There will always be variations within jurisdictions and there’s nowhere identical to the ACT. We are simply looking at some comparable situations and welcome people throwing up other more comparable situations.
5 Yass has different rates for its various areas. We’ve chosen the rates applicable to Yass town centre residents. Yes and thanks, the sewage charge should be removed so the revised figure for the bar graph is $1,728, which makes the NSW side of Ginninderry that little bit more inviting. Sorry, our bad there.

Garfield 3:38 pm 29 Sep 16

bringontheevidence said :

A reasonably sound analysis Tom. It’s good to see some solid work being done by some candidates on fact checking rather than fear campaigns. If only Kim would support the light rail he might have got my vote based on that alone…

Garfield said :

Before the rises started, rates for my property were about $1500 while my latest rates bill is $2400. That’s a 60% increase and way over your supposed increase of only 6.6% p.a. There are other people I’ve talked to whose rates have increased even more than mine have, and from what I can tell my increases have probably been less than the average.

Now to methodology problems.

1. You’ve started with the 12/13 figures as the base year, but you should be using 11/12 as 12/13 was the first year to which the current process was applied, and the increase in that first year was significant.
2. Land value is not a constant figure, but tends to increase over time. For example the government tells me my block of land increased 9% from the last valuation to this one. For you to use a constant value of $350,000 across all years is significantly understating the level of increases.
3. Land values differ between cities, so you need to use the value of an average block in the different cities, not a constant valuation.
4. Hobart City Council is literally the inner part of Hobart, with other councils such as Glenorchy, Clarence, Brighton & Kingborough effectively forming part of greater Hobart. In comparing Hobart rates to ACT rates you should be looking at the rates levied in the inner city, ignoring Tuggers, Belco etc, or you need to somehow factor in the rates payable in the surrounding Tasmanian councils. Using some Allhomes stats for example, an average house in Yarralumla probably has rates of around $6000 p.a. while an average house in Lyneham might be around $2800.
5. Looking at the way Yass has structured their rates, the only way you came to the figure you’ve listed above for residential properties is to include council charges for water & sewerage, which in the ACT are an additional separate charge.

I agree that the analysis should have started earlier, and the comparison to jurisdictions that include things like water and sewerage is incorrect.

However, your claim that your rates have gone up by more than the base is entirely spurious. You are paying higher rates because you are now significantly wealthier (based on house price growth anyway).

This opens up an interesting question: Would someone like yourself prefer to pay higher rates (because your property is worth more), or would you prefer if the ACT government directed the LDA to flood the market with new blocks to improve affordability, with the outcome that your property would be worth less and your rates would be lower?

My guess is that you’re happier with your valuable property, even if you do whinge a bit about your rates!

I looked up some information on Allhomes for Kambah. Taking the UAV history for 3 houses sold for the average price for the suburb for 2016, the increase for the 4 years to 2016/17 is at least 46% and the estimate for the 5 years is around 58%. An accurate figure for the 5 years is not possible as its hard to find historical rates tables for 2011/12 and earlier. The same process for Lyneham produced results of 43% for 4 years and 54% for 5 years. So with 1 inner city and 1 outer suburban suburb, 1 on the north and the other on the south, the averages are 44% over 4 years and 56% over 5 years. If we take Kim’s figure of 6.66% p.a. that’s 29% over 4 years and 38% over 5, or in other words 33% short of the reality in those two suburbs. Far from being a sound analysis, Kim’s article reads like Labor propaganda.

As to living in a property that’s notionally worth more, its not proportionally more valuable than other ACT properties compared to 4 years ago. To sell and then buy an equivalent home in a different suburb leaves me with a profit of $0.00. My preference would be for the ACT to have a government that could deliver necessary services without needing to jack up rates at a level that’s at least triple that of inflation.

Mysteryman 3:07 pm 29 Sep 16

Garfield said :

There are some massive holes in your methodology there, but let’s start with something irrefutable.

Before the rises started, rates for my property were about $1500 while my latest rates bill is $2400. That’s a 60% increase and way over your supposed increase of only 6.6% p.a. There are other people I’ve talked to whose rates have increased even more than mine have, and from what I can tell my increases have probably been less than the average.

Now to methodology problems.

1. You’ve started with the 12/13 figures as the base year, but you should be using 11/12 as 12/13 was the first year to which the current process was applied, and the increase in that first year was significant.

2. Land value is not a constant figure, but tends to increase over time. For example the government tells me my block of land increased 9% from the last valuation to this one. For you to use a constant value of $350,000 across all years is significantly understating the level of increases.

3. Land values differ between cities, so you need to use the value of an average block in the different cities, not a constant valuation.

4. Hobart City Council is literally the inner part of Hobart, with other councils such as Glenorchy, Clarence, Brighton & Kingborough effectively forming part of greater Hobart. In comparing Hobart rates to ACT rates you should be looking at the rates levied in the inner city, ignoring Tuggers, Belco etc, or you need to somehow factor in the rates payable in the surrounding Tasmanian councils. Using some Allhomes stats for example, an average house in Yarralumla probably has rates of around $6000 p.a. while an average house in Lyneham might be around $2800.

5. Looking at the way Yass has structured their rates, the only way you came to the figure you’ve listed above for residential properties is to include council charges for water & sewerage, which in the ACT are an additional separate charge.

Thank you for typing that out so that I didn’t have to.

bringontheevidence said :

However, your claim that your rates have gone up by more than the base is entirely spurious. You are paying higher rates because you are now significantly wealthier (based on house price growth anyway).

Rates have gone up because the government has increased them. Yes, land value has increased, but at a far, FAR smaller rate than the government’s increases to land rates.

miz 2:39 pm 29 Sep 16

For me, it is not so much ‘how much’ we pay, but whether we are getting value for money.
Frankly, all I have to do is look outside my house and it is clear we do not get value for money.
Off the top of my head, for example, we have Roads ACT pouring exfoliating gravel on suburban roads that do not even need repairing, because it is ‘due’ (ridiculous); we have a plethora of potholes elsewhere; we have perpetual mowing issues (you would have thought they would know how to adjust to weather conditions by now); we have graffiti galore (that the government petulantly insists is mostly the problem of the property owner even when the property backs onto public land); many local parks (at least in Tuggeranong) are a general disgrace with minimal shade trees and an air of general neglect; the govt is only now realising what a goose it was not to introduce green bins and hard rubbish collections years ago; we have most dogs off leash practically everywhere I walk, when they should be all on-leash in those locations; there always seems to be litter about, but no bins; and I understand that the ACT Govt’s ‘council approval’ process leaves a lot to be desired (this from a person who usually works in Sydney but has also worked here). I could go on but you get the idea.
The ACT Govt seems to rely heavily on individual citizens reporting problems (e.g. bike path lights not working, litter, graffiti, grass very long) instead of actually having a system to pick up problems when they occur (e.g. rangers).
It’s like any tax: people are happy to pay if they can see where the money goes. I don’t see my rates going anywhere in my area.

bringontheevidence 1:48 pm 29 Sep 16

A reasonably sound analysis Tom. It’s good to see some solid work being done by some candidates on fact checking rather than fear campaigns. If only Kim would support the light rail he might have got my vote based on that alone…

Garfield said :

Before the rises started, rates for my property were about $1500 while my latest rates bill is $2400. That’s a 60% increase and way over your supposed increase of only 6.6% p.a. There are other people I’ve talked to whose rates have increased even more than mine have, and from what I can tell my increases have probably been less than the average.

Now to methodology problems.

1. You’ve started with the 12/13 figures as the base year, but you should be using 11/12 as 12/13 was the first year to which the current process was applied, and the increase in that first year was significant.
2. Land value is not a constant figure, but tends to increase over time. For example the government tells me my block of land increased 9% from the last valuation to this one. For you to use a constant value of $350,000 across all years is significantly understating the level of increases.
3. Land values differ between cities, so you need to use the value of an average block in the different cities, not a constant valuation.
4. Hobart City Council is literally the inner part of Hobart, with other councils such as Glenorchy, Clarence, Brighton & Kingborough effectively forming part of greater Hobart. In comparing Hobart rates to ACT rates you should be looking at the rates levied in the inner city, ignoring Tuggers, Belco etc, or you need to somehow factor in the rates payable in the surrounding Tasmanian councils. Using some Allhomes stats for example, an average house in Yarralumla probably has rates of around $6000 p.a. while an average house in Lyneham might be around $2800.
5. Looking at the way Yass has structured their rates, the only way you came to the figure you’ve listed above for residential properties is to include council charges for water & sewerage, which in the ACT are an additional separate charge.

I agree that the analysis should have started earlier, and the comparison to jurisdictions that include things like water and sewerage is incorrect.

However, your claim that your rates have gone up by more than the base is entirely spurious. You are paying higher rates because you are now significantly wealthier (based on house price growth anyway).

This opens up an interesting question: Would someone like yourself prefer to pay higher rates (because your property is worth more), or would you prefer if the ACT government directed the LDA to flood the market with new blocks to improve affordability, with the outcome that your property would be worth less and your rates would be lower?

My guess is that you’re happier with your valuable property, even if you do whinge a bit about your rates!

Garfield 1:20 pm 29 Sep 16

There are some massive holes in your methodology there, but let’s start with something irrefutable.

Before the rises started, rates for my property were about $1500 while my latest rates bill is $2400. That’s a 60% increase and way over your supposed increase of only 6.6% p.a. There are other people I’ve talked to whose rates have increased even more than mine have, and from what I can tell my increases have probably been less than the average.

Now to methodology problems.

1. You’ve started with the 12/13 figures as the base year, but you should be using 11/12 as 12/13 was the first year to which the current process was applied, and the increase in that first year was significant.
2. Land value is not a constant figure, but tends to increase over time. For example the government tells me my block of land increased 9% from the last valuation to this one. For you to use a constant value of $350,000 across all years is significantly understating the level of increases.
3. Land values differ between cities, so you need to use the value of an average block in the different cities, not a constant valuation.
4. Hobart City Council is literally the inner part of Hobart, with other councils such as Glenorchy, Clarence, Brighton & Kingborough effectively forming part of greater Hobart. In comparing Hobart rates to ACT rates you should be looking at the rates levied in the inner city, ignoring Tuggers, Belco etc, or you need to somehow factor in the rates payable in the surrounding Tasmanian councils. Using some Allhomes stats for example, an average house in Yarralumla probably has rates of around $6000 p.a. while an average house in Lyneham might be around $2800.
5. Looking at the way Yass has structured their rates, the only way you came to the figure you’ve listed above for residential properties is to include council charges for water & sewerage, which in the ACT are an additional separate charge.

1967 1:08 pm 29 Sep 16

Now I could be wrong about this, it’s been a few years since I lived outside the ACT, but I’m sure the last place I paid rates, water and sewerage were included.

Have you taken ICONs , (ACTEWs) exorbitant pricing scheme into account when making your calculations?

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