Right now, the Victorian Government is holding a long-overdue full-scale review into the rating system.
The rates review is being conducted with the principles of equity and fairness in mind. It comes out of the growing crisis in regional Victoria for local government financial sustainability, and renewed calls by the Victorian Farmers Federation to trash local council rates as we know it.
Powerful actors are arguing to divorce rates from property values entirely via increased flat “municipal charges” to every property irrespective of size and value.
Victorians need a progressive local government rating system that equitably funds council services while fostering sustainable community and economic development.
Our existing rating system is far from ideal and fails to achieve these goals. Currently, owner-occupiers are penalised with flat charges to the benefit of wealthier landholders and speculators.
People who own modest properties and contribute to the community through renovations, investments in solar panels, and more efficient agricultural irrigation improvements are penalised. Meanwhile, absentee landholders who rundown their properties into disrepair and underuse, or even leave land vacant, are subsidised.
On top of all of this, significant concessions and exemptions are granted to wealthy landholders, which forces the average ratepayer to pay even more.
Prosper proposes that rates should be levied on the value of land only (Site Value), and not on the property’s total value (Capital Improved Value).
Additionally, we propose the state government should provide rates deferral until a change of ownership at mortgage rates to replace all concessions and exemptions, and be available to all individual ratepayers (and to a limited extent farming businesses). This would ensure ratepayers are not paying higher rates to support the estates of landholders of million-dollar properties.