Draft Rating Strategy

The Shire of Boddington has undertaken a review of the current rates structure, in order to provide an overarching framework for rate categories, minimum rates and differential rates. The resulting draft Rating Strategy considers the principles of objectivity, fairness and equity, consistency, transparency, and administrative efficiency.

The review was carried out by an independent consultant, and included extensive benchmarking across Western Australia. The draft Strategy does not address the amount of rates to be raised, but instead, how the total rates are distributed across residential, rural, commercial and mining categories.

Background

The Shire of Boddington currently utilises differential rates to redistribute the rates burden in the Shire by imposing a higher rate in the dollar on some uses of land in comparison to others. This rate in the dollar is multiplied by the State Government valuation to arrive at the rates billed for each property. Gross Rental Value (GRV) valuations are used for properties where improvements have been made to the land and a rental valuation can be calculated, whereas Unimproved Value (UV) valuations are applied to predominantly rural and general mining land, and are based on the land value only.

Key Findings of the Review

  • The GRV rate in the dollar for residential and commercial properties is very close to the average of the benchmarked local governments.
  • Generally, local governments differentially rate commercial/industrial properties at a higher rate than residential properties.
  • The GRV rate in the dollar for mining is significantly lower than the average of the benchmarked local governments.
  • The GRV average rate revenue per assessment for residential properties is similar to the benchmarked local governments, however, the GRV average rate revenue per assessment for commercial/industrial properties is significantly lower.
  • Minimum rates for GRV residential and commercial align with the benchmark averages.
  • The UV rate in the dollar aligns with averages, however, the average assessment is significantly lower than most of the benchmarked local governments due to a large number of hobby farms being incorrectly classified to this category.
  • The UV rate in the dollar for mining, is significantly lower than other local governments.

Summary recommendations

  • Implement a single (uniform) rate in the dollar for GRV properties, including residential, commercial/industrial and mining
  • Review the UV Rural properties method of valuation, to ensure the basis of valuation is appropriate, that is, the land is being used for rural purposes.
  • Consolidating UV differential rates to two categories, being mining, and rural.
  • Increase the UV Mining rates to align with sector averages.

What will this mean if the recommendations are implemented?

  • There will be no change to properties classified under the GRV residential and commercial categories
  • The GRV Mining rate in the dollar would increase to that of the GRV residential and commercial level
  • Small landholdings (hobby farms), and other non-rural holdings that are currently valued under the UV method would transition to a GRV valuation to reflect that the use of the land is not predominantly rural
  • UV Mining rates will be reviewed against benchmarks, with potential increases to the rate in the dollar.

Council adopted the draft Strategy on 24 May 2022 for community consultation. Submissions on the proposed Strategy have been extended and now close at 4pm on Thursday 30 June 2022.