It's no secret many are struggling to keep abreast of the cascading cost-of-living pressures elicited by soaring inflation, historic interest rate hikes and stagnant wages.
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And, with rumours of a recession lurking, there's probably never been a more inopportune time in recent memory to receive your council rates notice.
Like many local councils, the City of Ballarat has increased rates by 1.75 per cent in line with the Victorian government-imposed cap. But contrary to a City of Ballarat media release this week, that does not mean the "average property rate amount" across all categories will increase by 1.75 per cent.
With rate notices hot off the press, we've looked at everything you need to know to understand your rates notice, and why your rates have more than likely increased well above the 1.75 per cent flagged by council.
First, what are council rates and why do we pay them?
It's easy, if not tempting, to think of council rates as the amount council charges you to live in your own home, but that's a bit misleading.
In simple terms, rates are a species of property tax levelled each year on all property owners to pay for council facilities and services - think road maintenance, libraries or school crossings - as well as essential or non-essential projects, including the $7 million Ballarat Library upgrade, the $17.6 million Bridge Mall redevelopment and expensive $615,000 bike paths.
How are rates calculated?
According to i) the class or category of property - whether residential, commercial, industrial etc - and ii) the value of the property, as independently assessed by the Valuer General of Victoria.
So, what does it mean when council says rates have increased by 1.75 per cent.
The short answer is it doesn't mean your rates will only rise by 1.75 per cent. The 1.75 per cent rate hike conversely goes to the total council revenue raised by rates.
"When people see rates going up by 1.75 per cent, that's [council's] income [from rates] going up by 1.75 per cent," said City of Ballarat chief executive Evan King in April. "It doesn't mean people's rates will go up by [only] 1.75 per cent."
This is true. In recent days, The Courier has sighted a 2022/23 residential rate notice from Delacombe reflecting a 5.9 per cent rise, another from Golden Point with an 8.1 per cent jump, and one from Redan showing a hefty 21.2 per cent increase. Yikes.
And, as reported in this masthead on numerous occasions - and never once contested by council - the average residential property in Ballarat will attract $1588 in rates this year, up from $1492 last year, representing a 6.43 per cent increase. So, so much for 1.75 per cent.
Wait, why have my rates increased by more than 1.75 per cent?
Two reasons. One - as noted in the council media release - is house prices. Since the onset of the pandemic, housing demand in regional centres like Ballarat has surged, wholly outpacing demand for commercial and industrial properties, with house prices climbing as a result.
The upshot of this has been to shift some of the rates burden from commercial and industrial properties to residential properties, meaning residential ratepayers inevitably end up paying a larger slice of the revenue pie constituted by rates.
It bears emphasising, however, that council does not materially benefit from this scenario, as it doesn't generate any additional revenue from the city's higher house prices.
The other reason your rates have probably increased by more than 1.75 per cent - and one expressly overlooked in council's media statement - arises from council's Revenue and Rating Plan 2021-2025. By design, that plan reduces the rates payable by commercial and industrial ratepayers every year, and, in so doing, deliberately increases the burden borne by residential ratepayers.
The combined effect of these two factors is therefore higher average rates for residential ratepayers, and lower average rates for commercial and industrial ratepayers, whose rates have fallen this year by an average 12.6 per cent and 10 per cent respectively.
How do I calculate the percentage increase or decrease of my rates?
Simple. Let's say your rates are $1500, up from $1400 last year. Take the new figure ($1500) and subtract the old figure ($1400), and divide the result ($100) by the old sum ($1400) and then multiply the result by 100. Answer: 7.1 per cent increase.
I can't afford my rates. What help is available?
Pensioners are eligible for a state government funded waiver of $253 along with a $50 reduction in the fire services property levy. On top of that, council offers an additional $100 rebate for pensioners.
Those who aren't eligible for those concessions can otherwise apply for a deferral or waiver of rates and charges under council's financial hardship policy, which may result in a mutually agreed payment plan, a reduction in rates or a full waiver. Call the City of Ballarat customer service team on 5320 5500 to enquire about this policy.
Finally, residents can also dispute their property valuation by lodging an objection with the City of Ballarat.