Local governments impose rates on the properties within their district to raise revenue to fund the services and facilities provided to residents and visitors.
The quantum of rates payable is determined by three factors: the method of valuation of the land, the valuation of the land and improvements, and the rate in the dollar applied to that valuation by the local government.
Land is rated according to its unimproved value for land used predominantly for rural purposes or gross rental value for land used predominantly for non-rural purposes.
The Valuer General values the land in accordance with the provisions of the Valuation of Land Act 1978. The local government sets a rate in the dollar which is applied to this valuation to give the rates liability for each property.
A local government may impose a single general rate which applies to all of the properties in the unimproved value or gross rental value category. Alternatively the local government can distinguish between land in either category on the basis of
its zoning, use or whether it is vacant land (or other characteristic set out in regulations), or a combination of these factors, and apply a differential general rate to each.
The purpose of the imposition of a differential general rate is generally to ensure that every landowner makes a reasonable contribution to the rate burden.
This document describes the legislative and policy basis for the application of differential general rates to land being rated by a local government. In particular, it sets out the policy that guides the Minister for Local Government’s exercise
of the power to approve the imposition of a differential general rate which is more than twice the lowest differential general rate imposed by that local government.
The second part of this document provides guidance for local governments in requesting such an approval.
Local Government Act 1995
6.33. Differential general rates
- A local government may impose differential general rates according to any, or a combination, of the following characteristics:
- the purpose for which the land is zoned, whether or not under a local planning scheme or improvement scheme in force under the Planning and Development Act 2005; or
- a purpose for which the land is held or used as determined by the local government; or
- whether or not the land is vacant land; or
- any other characteristic or combination of characteristics prescribed.
- Regulations may:
- specify the characteristics under subsection (1) which a local government is to use; or
- limit the characteristics under subsection (1) which a local government is permitted to use.
- In imposing a differential general rate a local government is not to, without the approval of the Minister, impose a differential general rate which is more than twice the lowest differential general rate imposed by it.
- If during a financial year, the characteristics of any land which form the basis for the imposition of a differential general rate have changed, the local government is not to, on account of that change, amend the assessment of rates payable on that
land in respect of that financial year but this subsection does not apply in any case where section 6.40(1)(a) applies.
- A differential general rate that a local government purported to impose under this Act before the Local Government Amendment Act 2009 section 39(1)(a) came into operation is to be taken to have been as valid as if the amendment made by that
paragraph had been made before the purported imposition of that rate.
Local Government (Financial Management) Regulations 1996
52A. Characteristics prescribed for differential general rates (Act s. 6.33)
- In this regulation:
commencement day means the day on which the Local Government (Financial Management) Amendment Regulations (No. 2) 2012 regulation 5 comes into operation.
relevant district means a district
- is declared to be a district by an order made under section 2.1(1)(a) on or after commencement day; or
- has its boundaries changed by an order made under section 2.1(1)(b) on or after commencement day.
- For the purposes of section 6.33(1)(d), the following characteristics are prescribed in relation to land in a relevant district, where not more than 5 years has elapsed since the district last became a relevant district:
- whether or not the land is situated in a townsite as defined in the Land Administration Act 1997 section 3(1);
- whether or not the land is situated in a particular part of the district of the local government.
In relation to 52A(1), Regulation 5 of Local Government (Financial Management) Amendment Regulations (No. 2) 2012 came into effect on 30 June 2012.
The Minister may approve the imposition of a differential general rate that is more than twice the lowest differential general rate imposed by that local government. Without that approval the difference between differential general rates imposed
by a local government is limited to two times in each of the unimproved value and gross rental value categories.
The Minister’s approval under section 6.33(3) will be made consistently with the key values of objectivity, fairness and equity, consistency, transparency and administrative efficiency. To that end, the Minister will not approve an application for
an approval under this policy (the application) unless the Minister is satisfied of the following matters.
- The land on which differential general rates has been rated according to one or more of the following land characteristics:
- land use
- vacant land.
- Where there has been a change to the boundaries of the district within the past five years, the land on which differential general rates apply may also be rated according to one or more of the following land characteristics:
- whether or not it is situated in a town-site
- whether or not it is situated in a particular part of the district.
- The local government has proposed a differential general rate which is more than twice the lowest differential rate.
Fairness and Equity
- The Council of the local government has reviewed its expenditure and considered efficiency measures as part of its budget deliberations. This is to be reflected in the council minutes when it adopts the budget strategy and endorses objects and
reasons for each differential rating category and each minimum payment.
- The objects of imposing differential rates and reasons for each proposed differential general rate are set out by the local government in a publically available document.
- These objects and reasons clearly explain why each differential general rate is proposed to be imposed.
- The objects and reasons clearly explain why it is proposed to set the differential general rate at that particular rate.
- If a category of ratepayer is significantly contributing to the local government’s revenue through fees, charges and other payments, the local government has not used these same costs as the justification for the difference in differential general
- If there are fewer than thirty ratepayers who will be subject to the differential general rate, each affected ratepayer has been informed in writing by the local government of:
- the terms of this policy (through the provision of a copy of this document to the ratepayer
- the local government’s objects of and reasons for proposing to impose the differential general rates
- the differential general rate that will apply to the ratepayer’s property; and
- the differential general rate that applied in the previous year for comparison
and was given at least 21 days to make submissions to the local government on the proposal.
- The ratepayers’ submissions, if any, and the local government’s response to each ratepayer’s submission (as recorded in the minutes of the Council meeting at which the response was adopted) have been provided to the Minister.
- The local government has rated similar properties that are used for the same purpose in the same way.
- The proposed differential rates align with the rating strategy in the corporate business plan and long term financial plan or the council of the local government has detailed its reasons for deviating from that rating strategy.
- The local government has reviewed and considered rates proposed in neighbouring or similar local government districts in the rating strategy.
Transparency and administrative efficiency
- The local government has:
- prepared and made publically available a document clearly describing the object of and reason for each differential general rate;
- given public notice in a newspaper circulating generally throughout the district and exhibited to the public on a notice board at the local government’s office and at every local government library in the district (refer to Rating Policy – Giving Notice)
- published the notices after 1 May in the relevant year.
- The public notice published by the local government contained:
- details of each differential general rate that the local government intends to impose
- an invitation for submissions to be made by an elector or ratepayer
- a closing date for submissions which is at least twenty one days after the day on which the notice is published
- advice on the time and place where a document containing the objects of and reasons for the differential general rates can be inspected.
- The council of the local government has:
- each ratepayer submission (if any)
- resolved to make the application provided the Minister with the minutes and agenda papers relevant to these matters.
Guidance for local governments and affected ratepayers on requesting approval
The guidance below is directed to an application for approval under section 6.33(3) for the imposition of a differential general rate which is more than twice the lowest differential general rate imposed by it.
The policy section of this document identifies the matters on which the Minister will want to be satisfied before he or she approves an application.
Before making an application, a local government should be satisfied that:
- it intends to impose a differential general rate which is more than twice the lowest differential general rate imposed by it
- in light of the application and its supporting material, the Minister will be able to be satisfied that making such a determination would be consistent with the key values of objectivity, fairness and equity, consistency, transparency and administrative
efficiency, as detailed in the policy.
The starting point for a local government will be the matters identified under the key values of objectivity and consistency. The local government will need to ensure that all of the matters identified under those key values are addressed.
Once the local government is satisfied that it has addressed all the matters identified under the key values of objectivity and consistency, the local government will need to address the key value of fairness and equity. This includes the requirement
for the local government to give public notice of its intent to impose the differential general rates.
The Rating Policy – Giving Notice provides more information on this process. If there are fewer than thirty ratepayers
affected in any differential rate category, the local government will need to contact those ratepayers directly. That will involve the local government writing to the ratepayer, addressing each of the matters identified under that key
value and giving the ratepayer at least 21 days to make submissions.
Once the local government has given public notice, written to the affected ratepayers if required, and received any submissions from ratepayers, the council of the local government will need to consider:
- those submissions
- the other information addressing the key values of objectivity, consistency and fairness and equity.
Even if the council has previously considered the matter, the council must consider the submissions and the other information and resolve to make the application to the Minister.
Once the council has resolved to make the application, the following should be sent to the Minister:
- the application
- a copy of the public notice showing the publication date
- the supporting material addressing each of the matters identified under the key values of objectivity, fairness and equity, consistency, transparency and administrative efficiency.
The Minister will then consider the application and may request more information from the local government before granting approval.
The ratepayer should respond constructively to a request for submissions by a local government considering imposing specified differential general rates.
In particular, the ratepayer should form a view as to whether the matters set out under the key values have been correctly addressed.
If the ratepayer considers that these matters have not been correctly addressed, the ratepayer should set out why they hold this view in their submission to the local government.
In their submission, the ratepayer should address any other matter which they wish the local government and the Minister (if applicable) to consider.
In considering an application, the Minister may request information from the ratepayer before making their decision.
The completed application form and relevant attachments must be sent to:
Sector Regulation and Support
Department of Local Government, Sport and Cultural Industries
GPO Box 8349 Perth Business Centre WA 6849
January/February (approximately) – planning
The local government commences budget planning by reviewing the Corporate Plan and other relevant plans.
April (approximately) – budget Strategy
The council adopts the budget strategy and endorses objects and reasons for each differential rating category and each minimum payment.
1 May – notice period
In accordance with section 6.36(2)(a) of the Local Government Act 1995, the local government publishes a notice of its intention to impose differential general rates on or after this date.
At least 21 days after the notice is published
(not including date of appearance)
Council considers submissions and determines appropriate level of
Council decision to seek Ministerial approval for the imposition of differential general rates that fall within section 6.33(3).
A local government needs to allow three weeks for the processing of an application from the date all of the required information is received by the Department of Local Government and Communities.
The local government’s budget is to be adopted by 31 August under section 6.2(1) of the Local Government Act 1995. The budget cannot be adopted until after the Minister makes their decision.
If the local government has submitted the final documents for Ministerial approval later than the end of July, consideration may need to be given by the local government to applying for Ministerial approval for an extension to the budget adoption.