Universities, private schools and solar and wind farms in Victoria should pay council rates instead of receiving exemptions, Victoria's local governments' peak body believes.
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The Municipal Association of Victoria has made the proposal in a submission to the state government's rates review.
The councils argue the exemptions - laid out in state law - are unfair as such organisations no longer serve just the local community.
Exemptions also apply for mining land, electricity generators, state land land used for commercial purposes, RSL and gaming venues on state land, and religious property holdings used for commercial purposes.
Some are competing in statewide, national and international markets, the association has stressed.
That means everyday rate-payers are subsiding their commercial activities.
"Mum and dad home owners and small businesses are paying their council rate," MAV President and Boroondara Councillor Coral Ross said on Wednesday.
"Exempt private and commercial activities should also be paying a fair and equitable share of rates.
"No system of taxation is perfect, but a review of local government rates is long overdue given that property rating began in Victoria in the mid-19th Century."
The association is also worried some small rural and regional councils don't have the population needed to raise enough revenue to provide essential services to their communities.
It has urged the state government to lend them a hand, by creating a small councils funding program or reviewing the split of road and bridge responsibilities between councils and VicRoads.
The MAV has also proposed introducing simpler rates notices to help the community better understand them, and rating residential village homes.
It has further suggested giving municipalities which have been declared as tourist destinations the option of wielding a tourism levy.
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