Media Statements - Review of local government valuations and rating.

26/11/00

Local Government Minister Paul Omodei is to establish an expert group to review the process for determining the valuation system to be used for rating rural properties which have more than one use or which cannot be clearly defined as rural.

Mr Omodei said that under the Local Government Act, land predominantly used for rural purposes was rated on unimproved value and land used predominantly for non-rural purposes was rated on gross rental value.

There was no definition of ‘rural’ and problems were arising because of mixed use or because ‘non-traditional’ rural uses were being introduced.

The spread of activities such as vineyards, cellar door sales, restaurants and holiday accommodation on rural properties was bringing the problem to a head.

The problem was most apparent in South-West shires such as Busselton, Augusta-Margaret River and Nannup, but it was likely to spread as more land owners diversified their activities.

There was also concern that some councils may take the view that plantation timber was not a rural use and seek to apply a GRV.

The application of a GRV to a rural holding could have a serious financial impact, but at the same time councils needed to be able to rate with equity when the activities on a small rural holding were not fundamentally different from similar activities in non-rural parts of the shire.

Mr Omodei said he had asked the Department of Local Government to make an assessment of the differing approaches currently taken by councils as a preliminary to the expert review which would report to the Minister by March 30, 2001.

The review would:

consider the existing law;
examine ways in which differential rating powers and other discretionary rating mechanisms could assist local governments to achieve rating equity;
recommend appropriate consultation processes when changes were planned; and -
suggest matters to be included in guidelines to local governments considering the valuation base for properties.

It was expected that the review would make the processes adopted by councils and the outcomes more transparent, accountable and consistent.

Media contact: Hugh Ryan 9213 6700