Differential rating categories

The Local Government Act 1989 allows a Council to apply a differential rating system if it considers that the differential rate will contribute to the carrying out of its functions.

Council collects rates from residents and businesses in its municipality to help fund its local community infrastructure and service obligations. Council rates are a form of property tax. Council is committed to having a rating strategy that is underpinned by sound principles, which are well understood, communicated to ratepayers and compliant with current legislation.

Having a rating strategy requires Council to strike a balance between competing principles to come up with a mixture of rates and charges that provides the income needed for its annual budget while meeting the tests of equity, efficiency and simplicity. For the purposes of understanding how equity, efficiency and simplicity are applied in this situation an overview is provided:

  • Equity, including both horizontal and vertical equity. Horizontal equity means that those in the same position e.g. with the same property value, should be treated the same. Vertical equity in respect to property taxation means that higher property values should incur higher levels of tax.
  • Efficiency, meaning that in a technical sense the tax should not unduly interfere with the efficient operation of the Council. The tax should be consistent with the major policy objectives of Council.
  • Simplicity for both administrative ease (and therefore lower cost) and to ensure that the tax is understood by taxpayers. The latter ensures that the tax system is transparent and capable of being questioned and challenged by ratepayers.

After reviewing the rating options for the current financial year, Council adopted the budget to include the following differential rating categories for 2015/2016:

General Rate

General Rate is any land which does not have the characteristics of:

  1. Vacant Land
  2. Extractive Industry Land
  3. Commercial/Industrial Developed Land
  4. Commercial/Industrial Vacant Land
  5. Retirement Village Land
  6. Rural Living Land
  7. Rural Land
  8. Urban Growth Land.

Vacant Land

Vacant Land is any land:

  1. on which no building with an approved occupancy permit is erected
  2. located in a precinct structure plan, and with an approved planning permit for residential subdivision
  3. which does not have the characteristics of:
    3.1   Commercial/Industrial Vacant Land
    3.2   Rural Living Land
    3.3   Rural Land
    3.4   Urban Growth Land.

Extractive Industry Land

Extractive Industry Land is any land which is:

  1. used primarily for the extraction or removal of stone, including the treatment of stone
  2. located within a Special Use Zone 1 under the Melton Planning Scheme.

Commercial/Industrial Developed Land

Commercial/Industrial Developed land is any land which:

  1. is used or adapted or designed to be used primarily for commercial or industrial purposes
  2. does not have the characteristics of Extractive Industry Land.

Commercial/Industrial Vacant Land

Commercial/Industrial Vacant Land is any land:

  1. on which no building with an approved occupancy permit is erected
  2. which is located within:
    2.1   a Business 1 Zone
    2.2   a Comprehensive Development Zone
    2.3   a Mixed Use Zone
    2.4   an Industrial Zone 1
    2.5   an Industrial Zone 3
    2.6   Special Use Zone 4
    2.7   Special Use Zone 3
    2.8   Special Use Zone 6
    2.9   Special Use Zone 7
    2.10   Urban Growth Zone located in a precinct structure plan, and with an approved planning permit for commercial/industrial use under the Melton Planning Scheme.

Retirement Village Land

Retirement Village Land is any land which is located within a retirement village land under the Retirement Villages Act 1986.

Rural Living Land

Rural Living Land is any land which is:

  1. two (2) or more hectares but less than ten (10) hectares in area
  2. located within:
    2.1   a Green Wedge A Zone
    2.2   a Green Wedge Zone
    2.3   a Rural Conservation Zone
    2.4   a Farming Zone
    2.5   Special Use Zone 5
    under the Melton Planning Scheme.

Rural Land

Rural Land is any land which is:

  1. ten (10) hectares or more in area
  2. located within:
    2.1   a Green Wedge A Zone
    2.2   a Green Wedge Zone
    2.3   a Rural Conservation Zone
    2.4   a Farming Zone
    2.5   Special Use Zone 5
    under the Melton Planning Scheme.

Urban Growth Land

Urban Growth Land is any land which is:

  1. two (2) or more hectares in area
  2. located within an Urban Growth Zone under the Melton Planning Scheme in respect of which no precinct structure plan has been approved.