Thursday, May 30, 2024

Hobart to review rates strategy

City of Hobart Council has announced it will review its Rating and Valuation Strategy in a bid to ensure the City has a rating system that is fair, simple, supports ratepayers capacity to pay, and is efficient and sustainable for the future.

At its October meeting, the Council endorsed a change from Assessed Annual Value (AAV) to Capital Value (CV) as the preferred property valuation basis for the strategy.

Hobart Lord Mayor Anna Reynolds said Capital Value aligned strongly with the principles of taxation, ensuring a fair and equitable approach while also being the most straightforward for residents to understand.

“Our comprehensive review found that Capital Value stands out as the most suitable basis for our Rating and Valuation Strategy,” she said.

“It is not only easy to understand, but also equitable, particularly concerning the capacity to pay.

“Moreover, Capital Value exhibits the least volatility in a property market where property values are growing at different rates compared to rental values.”

Using Capital Value as the foundation for rates enables the City to adopt a more nuanced approach through differential rating, the Lord Mayor said.

Council Manager Rates, Procurement and Risk, Lara MacDonell said the approach can better reflect the capacity to pay for property owners and provides the Council with the flexibility to levy rates based on specific criteria.

“Moving to Capital Value represents a significant step toward improving our Rating and Valuation Strategy,” Ms MacDonell said.

“It aligns with our commitment to fairness and transparency in financial matters.

“This change allows us to strike a balance between ensuring the financial sustainability of our city and the well-being of our residents.”

While the Council has endorsed the change of systems, how it is implemented is now open for community feedback.

Hobart has 25,088 properties and seven different land uses: commercial, industrial, primary production (farming), public enterprise, residential, sport & recreation and vacant land.

A range of options for how the Capital Value system is implemented are now available for community consultation and review that looks at municipal charges and differential rates across commercial, residential, industrial etc.

The Council says it has not identified any option as the preferred model and none of the options proposed will have any impact on the total amount of rates and charges raised.

“Public feedback is essential in shaping the future of the Rating and Valuation Strategy, ensuring that it serves the best interests of the residents while sustaining the city’s fiscal stability,” Ms MacDonell said.

Community feedback is open from now until 2 February 2024.

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