Rural residential overhaul

Rural Residential rate payers could be slugged up to 27 per cent more as Snowy Valleys Council works to harmonise rates between the former Tumut and Tumbarumba Shires.

Rural Residential rate payers could be slugged up to 27 per cent more as Snowy Valleys Council works to harmonise rates between the former Tumut and Tumbarumba Shires.

A review of the council’s rating review is strongly recommending eliminating the Rural Residential (RR) subcategory, moving those properties into the Residential category. The change would mean an increase in rates for most RR landholders of 2-27 per cent, depending on their location and land value. Only the upper tier of Tumut RR residents would see a decrease in rates, with a possible decrease of around 10 per cent for those more expensive properties.  

During the recent rates review, a public survey asked respondents to choose between either removing the subcategory and transitioning current RR properties to the Residential category, or leaving the subcategory as it is and “continue to allow residential category to carry a greater share of the rating burden.”

Kerrie and Joe Hurst live on Morgans Reserve Road. Their 11-acre property was originally listed as Rural, but about 20 years ago, Mrs Hurst said the council moved them to the RR subcategory without giving them any choice in the matter.

“If they’re going to eliminate (RR), I’d rather go rural than residential,” she said. 

“I like being Rural Residential, I don’t want to be residential. I want to be rural.”

Mrs Hurst said her property doesn’t have rubbish collection, water or sewer service. Instead, the couple pay for private garbage collection and they have a bore and their own septic.

“I pay a lot more than the rates that everybody else is getting,” she said.

“We get no services whatsoever. We are a farm, we’re not a house like in town.”

Mrs Hurst said the family wasn’t given a choice when their property was moved to the RR subcategory and their rates went up. She was clear about her preference now: “I want my rates to be cheaper, naturally.”

The council’s rates review contended that the RR subcategory is receiving the same share of council services as the Residential category, but paying 36 per cent less.

The Hurst’s home is eight kilometres from Tumut and Mrs Hurst said she hadn’t received any direct communication about a possible change to her property’s category. She wasn’t interested in being moved to the Residential category.

“Not unless they’re going to give me the services to go with it.”

SVC explained that properties can only be listed as ‘Farmland’ if they fit the definitions within the Local Government Act.

A spokesperson said, “As per the Act, in order for land to be categorised as farmland, it must demonstrate that its dominant use is for farming (that is, the business or industry of grazing, animal feedlots, dairying, pig-farming, poultry farming, viticulture, orcharding, bee-keeping, horticulture, vegetable growing, the growing of crops of any kind, forestry or aquaculture within the meaning of the Fisheries Management Act 1994, or any combination of those businesses or industries) which:

a) has a significant and substantial commercial purpose or character, and

b) is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made).”

Previously, the Tumut and Tumbarumba Shire Councils included the Rural Residential category as a sub-category of the Residential category. SVC said the size of the land parcels to qualify for Rural Residential category is between 2ha and 40ha and in general prohibits it being able to meet the farmland category requirements.

The rates review closed to public comment on August 31 and feedback is currently being reviewed by SVC staff. A report is expected to be delivered to a council workshop next month, after which the council will make a decision on a preferred rating option.

Information about the preferred rating options will be shared with the community in November, when landowners will be able to see the impact of the new rates system on their property. Further feedback will be taken at that time for the council to review.

The council is scheduled to publicly announce their final preferred ratings option early next year, before officially adopting it as part of the budget process, ready for implementation by the legislative deadline of July 1 next year.

OPTIONS

Option A

If the RR subcategory is eliminated, which SVC lists as ‘Option A’, landowners would pay a new Residential rate with a 50 per cent base rate ($320 per property) and an ad valorem rate based on the value of the land.

A summary published by SVC in August explained, “This option would result in a consistent increase of around 20 per cent for all rural residential ratepayers in Tumbarumba. A typical property (excluding non-compliant ones that must return to residential anyway) valued around $120,000 would pay around $130 more.”

Non-compliant properties include those which are less than two hectares in size.

The summary continued: “Rural residential properties in Tumut (excluding non-compliant ones) valued at less than $60,000 would see savings with the elimination of the minimum rate. The largest increases would be for properties around $86,000 ($115 or 25 per cent, which is still less than the premium that has been paid by residential ratepayers for the last 15 years) while properties over $135,000 would see savings increasing to around $275 (17 per cent) for a property valued at $250,000.”

Option B

The other option proposed by SVC in the rates review, ‘Option B’, is to retain the RR subcategory with a 40 per cent base rate ($375 per property) and an ad valorem rate calculated on the value of the property.

The SVC summary explained, “The rates payable under this option for complying rural residential properties between $50,000 and $230,000 (which includes 90% of all properties in Tumbarumba and 80% of Tumut) would be less than $35 different from rates under option A. Lower value properties would pay slightly more under this option, while higher value properties would pay slightly more under option A. 

“Given that there is very little difference in rates under this option (to retain the subcategory) compared to option A (to eliminate it) and that almost half of all properties in both Tumut and Tumbarumba are non-compliant with the requirements of the Local Government Act, there is no reason to retain it.”