- Written by Teela Griffin Penrith City Council (02) 4732 7777 (02) 4732 7958 firstname.lastname@example.org https://www.penrithcity.nsw.gov.au 601 High St Penrith NSW 2750 Australia
The Valuer General oversees the land valuation system and is responsible for determining impartial land values every three years. Under the Valuation of Land Act 1916, land value is the value of your land only. It does not include the value of your home or other structures and improvements. The Valuer General oversees the land valuation system and is responsible for determining impartial land values every three years. Under the Valuation of Land Act 1916, land value is the value of your land only. It does not include the value of your home or other structures and improvements.
Land values are used by Councils for calculating rates. The independent land values are generally updated every three years so each valuation is used by Council for three years until the next valuation is received. Ratepayers are entitled to object to their land valuation and can do so through the Valuer General’s Office. If supported then the Council can review the rates levied on the basis of the revised valuation.
The Valuer General provides a fact sheet to assist property owners with understanding land values which you can view on their website.
Land valuation and rates
Council continues to evaluate the impact of rates and seeks to ensure the system we use to calculate rates is the most equitable for the whole LGA. The total amount of rates collected by Council remains the same regardless of changes to land values; it’s the rating structure chosen that determines how rates are shared across all property owners.
Councils can choose how they calculate and distribute rates among categories of rateable properties in the LGA. For each category or subcategory, rates can be calculated in one of three ways. They can be based:
Option 1 - entirely on the land value of the property (known as an ad valorem rate)
Option 2 - on a combination of the land value of the property and a fixed amount per property (known as a base rate plus ad valorem rate)
Option 3 - entirely on the land value, but subject to a minimum amount (known as ad valorem with minimum rate).
Council uses Option 3 as we believe this to be the most equitable for the whole LGA; where property owners are asked to pay their share based on their individual property value.
The system we use calculates rate based on land value with a minimum amount applied to all properties under a certain land value threshold (known as ad valorem with minimum rate). How much each owner pays depends on the rating category for their property and the value of their land.
Council is required to categorise each parcel of land for rating purposes according to its dominant use e.g. residential, farmland, business or mining. Council also has two Business sub-categories for the Penrith CBD area and the St Marys Town Centre.
- RESIDENTIAL - dominant use as residential accommodation or for vacant land the land is zoned for residential purposes.
- BUSINESS – where the dominant use is for commercial or industrial use, or cannot be categorised in one of the other three categories
- FARMLAND – dominant use is for a significant and substantial farming business which is engaged in for the purpose of profit and is continuous or repetitive. Categorisation is subject to an approval process where owners must demonstrate the significance of the farming activity.
- MINING – where the owner has rights to mine coal or metals from land (there are presently no mining properties in Penrith City).
If you believe your rating category is incorrect, you can ask us to review your category at any time. If you disagree with Council’s determination after the review, you may appeal to the Land and Environment Court under Section 526(1) of the NSW Local Government Act 1993 within 30 days of the declaration.
If your rating category changes, you must advise Council within 30 days.
Changes to your land valuation
The Valuer General has released new property values that will be applied to rates from July 2020. The Valuer General is an independent statutory officer responsible for providing impartial land values every three years. The most recent valuation is based on property sales in your area around 1 July 2019.
The changes to land valuations may impact the rates you pay to Council each year. Some residents will have increases as a result of the increase in their land value compared to the average land valuation increase to other properties within our LGA. There are a number of properties that will receive a decrease in rates based on their new land values compared to the average land valuation increase to other properties within our LGA. Only 10% of all properties in the LGA will receive an increase greater than $100 per year from July 2020.
If you disagree with your new land value there are avenues available to you to object. Residents should contact the NSW Valuation Service on 1800 110 038 to seek support.
Frequently Asked Questions
How will I know what my land value is?
The NSW Valuer General has issued Valuation Notices to owners of properties in the Penrith Local Government area from March 2020. If you have not received a Valuation Notice, you can contact the NSW Valuation Service on 1800 110 038.
What if I believe my valuation is too high?
If you disagree with your new land value there are avenues available to you to object. Contact NSW Valuation Services on 1800 110 038 for more information.
How does the new land valuation affect my rates?
In the first financial year new valuations are used for rates, there may be some fluctuations in the rates you pay, depending on how your valuation has changed in comparison to other properties within our LGA.
Only 10% of all properties in the LGA will receive an increase greater than $100 per year from July 2020. This means there are some residents who will have increases greater than this as a result of an increase in their land value. There are also properties that will receive a decrease in rates based on their new land values.
While the average valuation increase for all residential properties was 19%, different suburb valuation increases ranged from 1% for Jordan Springs up to 72% for Kemps Creek. The change to the amount that you will pay for your rates in 2020-21 will depend on how different your valuation change is to this average.
What happens if I can’t pay my rates?
Council can assist residents who are experiencing financial hardship. There’s a range of assistance measures available and we encourage property owners to contact Council’s Rates Enquiries on 02 4732 7676 if you are experiencing hardship. We’re here to help and will work to understand your individual situation to see how we can assist.
Why is the valuation increase for my suburb different than other suburbs?
Land valuations are carried out every three years and the most recent valuation is based on property sales in your area around 1 July 2019. Because land valuations are done as a snapshot on a certain date, suburbs can be at different points in the property market on that date, leading to differences in valuations, even for neighbouring suburbs.
A big increase in land valuation since the last valuation could indicate a lift in the property market in your suburb or that your property was at the low part of the market at the time of the last valuation, and has now caught up with the market.
A small increase in land valuation could indicate a flat property market for your suburb or that your property was at the high part of the market at the time of the last valuation, with only a small increase as other suburbs catch up with the market.
How will my rates change with my new land valuation?
Council has carried out some estimates of how the new land valuations are likely to impact the rates for different residential owners in different suburbs throughout the City.
The table below shows the average residential land valuation increase in the Penrith LGA adjusted to exclude non-typical high value development and other lands. Your change may be different to these amounts as the amounts are averages only. These amounts are based on the continuation of existing rating policies which are reviewed by Council and are subject to change.
|Suburb||Average Valuation Increase||Estimated Rates Increase or Decrease in 2020-21*||Estimated Rates Increase or Decrease in 2020-21*|
|NORTH ST MARYS||25||2||23|
This table shows the average residential land valuation increase in the Penrith LGA with the exclusion of high value development land parcels.
My rates are going up. Will my rates ever go down?
On average rates do increase each year, but after a revaluation every three years, the amount each ratepayer pays from the previous year can actually reduce. Unfortunately, rates reductions for some owners are countered by increases for other property owners.
In 2020-21, there are 12 out of 36 suburbs where rates will decrease on average from the amount payable in 2019-20, due to lower than average valuation increases for properties in those suburbs.
Over time as valuations fluctuate, most suburbs may see a rate decrease at some time. The top 10 suburbs increasing by the greatest proportion in 2020-21 have all received rates reductions after a revaluation at least once since the 2012 valuation. For example, Luddenham will increase on average by 15% or $577 in 2020-21, but reduced by 23% or $610 after the 2012 revaluation.
See the table below showing the most recent rates reduction for the top ten suburbs increasing in 2020-21.
|Land Rates Reduction After Revaluation %||Last Rates Reduction After Revaluation $||Valuation Year|
Can Council change the way that rates are assessed, particularly for rural property owners?
NSW Councils have limited options under the NSW Local Government Act to be able to change the way that rates are assessed. Council has explored the alternate options many times over the years to try to limit the impact of increasing rates and land valuations, particularly for rural property owners.
The options available include:
Option A - setting a different and lower rate for certain rural residential properties.
Option B - changing the way that the rates are assessed.
Council does not receive extra rates under either of the options. It’s just that the rates would be distributed among ratepayers differently, with some owners paying either more or less under each option. In comparing the merits of each option, Council must take into consideration who is impacted by any changes, particularly vulnerable property owners such as pensioners.
Option A Setting a different rate for rural residential properties
Unfortunately, the option of using a different rate for rural residential properties restricts eligibility depending on the size and occupation of the land with less than half of rural properties owners actually being eligible. This means that a majority of rural owners would experience an increase that would fund the discount for the eligible rural owners. Under the current rules, Council believes that this option is not viable or equitable.
Option B Changing the way that the rates are assessed
NSW Councils have three options with the way that rates are structured. Under each option, the total amount of rates collected by Council is the same, however the rates are shared differently among property owners:
- Ad Valorem (only) -Land value multiplied by a rate.
- Base Rate plus Ad Valorem - Combination of a part Base (fixed) amount plus Part land value multiplied by a rate.
- Ad Valorem with a Minimum Rate (Council’s current method) - Land value multiplied by a rate, but properties under a certain land value threshold are subject to a minimum rate.
Has Council considered any of these options for 2020-21?
Yes. Council investigated the likely impact of changing to a Base Rate option in 2021. When a comparison was done between the two different methods, the impacts of the Base Rate method showed the following adverse impacts (when compared to continuing with the current method of Ad Valorem with a Minimum Rate):
- 20,000 more property owners with rates increases greater than $200
- 4,000 more pensioners with rates increases greater than $200
- Average rates increase for pensioners of 10% (compared to 2% under current method)
- 60% of properties would pay greater than $100 rates increase (compared to 10% under current method)
Due to these adverse impacts, particularly the impacts on pensioners, Council was unable to support a change from the current rating method at this time.
Have your say
The 2020-21 Draft Operational Plan will be on public exhibition for a period of 28 days from 4 May until 1 June 2020. The exhibition period is an opportunity for you to review and comment on Council’s plans for the future including the proposed rates information.
Following the exhibition period all submissions will be considered and reported to the Ordinary Meeting of Council scheduled for 22 June 2020 when the Operational Plan will be adopted and the 2020-21 rates set.
You are encouraged to take this opportunity to view the documents while on exhibition and if you have concerns, make a formal submission to ensure your feedback can be considered. Your first rates notice that uses your new valuation will be sent to you in early July 2020.
For more information about rates, call 4732 7676.