Blue Mountains businesses will subsidise a rates reduction for home owners over the next three years, with a new rating structure due to start on July 1.
Two options were put to the June 26 Blue Mountains City Council (BMCC) to bring the council’s system in line with state legislation following a two-year review that found it wasn’t as simple, fair or broadly uniform as it could be.
A majority of councillors supported the first option, which proposed keeping the same rate calculation and minimum rate amounts for the majority of the city but increasing business rates in order to decrease residential rates.
The increases will take place over three years, with small increases to business rates in 2012/13 and “larger but equal” changes in the second and third years.
The option also compresses the highest and lowest residential and business ad valorem rates — or amount in the dollar that is multiplied on land value to calculate rates — over the three years, except for in residential areas of Medlow Bath, Bullaburra to Linden and Warrimoo to Lapstone until the third year.
In the first year, business rates revenue will be increased — and residential revenue decreased — by $83,000, while years two and three it will be further increased by $166,000 per year, with residential again decreasing by the same amount.
Blue Mountains Mayor Daniel Myles welcomed the adoption of the reforms, saying it was long overdue.
“I’m delighted that we’ve been able to begin the process of delivering a fairer system for Mountains residents,” he said outside the meeting.
“The council is not making any extra money out of this but simply providing a level playing field.”
Rates were determined by land values set by the NSW Valuer General, multiplied by a small percentage amount determined by BMCC, he said.
“The NSW Valuer General takes into account issues such as isolation and access to services as well as property size and market value,” he said.
“The State Government makes it clear that land value should be the primary determinant of rates.
“The percentages that residents were paying varied greatly. Homes in Springwood were paying a percentage 16 per cent higher than some other towns. We’re moving toward a system where everyone will pay the same percentage.
“Areas with a high land value will pay more in rates than will areas with low land value and that’s how it should be.”
Business operators could claim council rates against their tax and could also pass increases onto customers, which residents couldn’t do, Clr Myles said.
“It is therefore appropriate to increase the ratio between business and residential properties to reflect this,” he said.
Deputy Mayor Mark Greenhill, who moved the reforms at the meeting, labelled the change “a real team effort.
“. . . The Mayor worked with very professional officers who came up with an outcome that actually lowers rates for all of Ward 4,” he said.
“It is not often that an elected member gets to announce a reduction in taxes for those they represent. I would like to congratulate the mayor and the officers who have come up with the right balance.”
Who is affected?
More than 82 per cent of residential ratepayers will experience no change or a decrease to rates in 2012/13;
Just over 17.5 per cent of residential ratepayers will face an increase in 2012/13;
In 2012/13, more than 68 per cent of business ratepayers will experience an increase to their rates, while only 3.94 per cent will see a drop;
Just over 27 per cent of business ratepayers will see no changes to their rates in 2012/13;
There is no movement or change to farmland rates under the reforms;
By year three, there will be four single categories of rates — residential, business, farmland and mining — as opposed to the 28 currently in place;
Areas to record an average drop in rates compared to the current structure include Blackheath, Medlow Bath, Bullaburra, Lawson, Hazelbrook, Woodford, Linden, Faulconbridge, Winmalee, Springwood, Yellow Rock, Valley Heights, Sun Valley, Warrimoo, Blaxland, Mt Riverview, Glenbrook, and Lapstone.