[Lee Howard]

Just wanted to check on how we should treat conservation agreements.

[Pete Timmins]

I asked that question via ESPL Info on 13-Sep-16 and have not yet had a response.

[Mary Klower]

I was under the assumption that the ESPL will only be levied on the portion of rates levied for the House etc and not the land that is under the conservation agreement. It may be that a manual calculation will need to be done for these.
This would also apply for postponed rates and the ESPL would be levied only on the rateable land value and not the portion which is postponed.
If anyone else has further information please let us know.
Mary

[Tracey Walker]

Hi All,
As per the ESPL operating manual page 7-8 the levy is charged as if the land value of the land were the non-attributable value of the land. Which when reading the draft legislation is covered in s18(3).

I would assume that the software companies would be able to write something into the system you are on, to do the adjustment automatically.

[nucleo]

Hi All
I have a property that is 100% conservation but has a large house on it.

[Susan Scott]

Software do it automatically???? Not if you’re on Authority! Conservation agreements must be calculated manually.

[Lee Howard]

After reading the summary of changes to draft legislation is the whole assessment subject to a conservation agreement to be classified as public benefit land even if only say 50% is conservation?

[Emma Murphy]

So, this is the response I have from our ESPL advisor
“Firstly, in relation to conservation agreements, land that is the subject of a conservation agreement under the Biodiversity Conservation Act 2016 or National Parks and Wildlife Act 1974 can be classified as Public Benefit Land (refer Schedule 1 (10)(e)) if the land is not used for profit-making purposes and the conservation of the land is the predominant use of the land. There is no apportionment as is the case with Council rates. In determining whether the predominant use of the land is for conservation purposes, a useful starting point would be the percentage area of the land that is subject to the conservation agreement. If more than 50 percent of the land is covered by a conservation agreement, then that would be prima facie evidence that the predominant use complies with Schedule 1. If the area covered by the conservation agreement is only 6 percent, then it would be difficult to argue that land conservation is the predominant use of the land, and it should therefore be classified as if it was rateable by Council (ie, farmland, residential, industrial or commercial).”

So am I right in assuming…that based on these sceneries….

Property 1. 100% conservation under the National Parks act, and no idea if it Non for profit (privately owned), could be Public Benefit?
Property 2. 21% conservation under the Nation parks act, yet isn’t NFP, is farmland and ESPL on the whole LV, not the LV less the conservation area.
Property 3. 54% conservation under Nation parks act, and isn’t NRP, is still farmland (because it cant be Public benefit, based that is still is for profit and ESPL on the whole LV, not the LV less the conservation area.

Look forward to anyones thoughts…..

[Steve Ansoul]

Hi Lee,

I asked NSW Treasury to review my interpretation of how to apply FESL specifically in regard to conservation agreements and I’ve reproduced my interpretations and Kevin Pugh’s 21/04/17 comments below. It’s a bit lengthy and Kevin Pugh’s comments are in bold + prefixed with “***”. Hope this helps. Steve A.

***Council is ultimately responsible for how it interprets and applies the FESL Act. Even legislation as detailed as the FESL Act is still, to a certain degree, pitched as a reasonably high level framework which then provides discretion for councils to interpret. With that caveat out of the way, allow me to provide feedback on your proposed interpretation below:

Classification

• Section 41 of the Fire and Emergency Services Levy Bill 2017 (FESLB) sets out the steps to classify land and S41 (3)(b) states classify as public benefit land (PBL) if;
o S43 (1)(a) it’s not for profit
 S43 (2) defines not for profit to mean that the whole or the dominant part of the land is not used for profit.
o S43 (1)(b) conservation agreements are listed in the PBL land use purpose list (FESLB Schedule 1 Part 10 (e)).
o S43 (1)(c) states the above purpose (i.e. in this case a CA) is the dominant use of the land it complies as PBL if above conditions are met.

o MY INTERPRETATION: If the percentage of the CA covers greater than 50% of the land then classify as PBL as the CA is the dominant purpose and the use or profit making ability of the remaining portion of the land is irrelevant. If the CA covers less than 50% of the land ,PBL not applicable and classify land based on its dominant use.

o ***This would seem to be one of several reasonable interpretations that might be made. Another might take account of how many people visit and/or enjoy use of the respective sub-parcels and how often.

Land Value Component

• Section 18 (1) of the FESLB states that the land value to use for FESL ad-valorem calculation purposes is the land value we use for rating pursuant to Chapter 15 of the Local Government Act 1993 (LGA). Further sub-sections under s18 provide for exceptions to this rule however, none mention conservation agreements.
• Section 555 (1)(b1) of the LGA states that CA land is exempt from rating and s555 (3) of the LGA states that the rate levied is to be reduced by the land area attributable to the CA.

• MY INTERPRETATION: Leaning towards using the total land value supplied by the Valuer General to calculate FESL for CA land regardless of the FESL classification determined by council. Reason being that S555 (3) of LGA uses the term “any rate levied” rather than requiring a council to reduce the land value based on the percentage of land under CA before levying the rate. This section also covers a reduction of the base amount (fixed rate component) for CA properties which wouldn’t be the case if S555 (3) simply required a land value adjustment. I believe it is common practice (possibly to cater for software limitations) for councils to reduce the land value for CA properties to cater for the automatic levy reduction which may not be technically correct but would result in a correct ad-valorem component levy being calculated.

• ***I think this is the most reasonable interpretation, and that alternative interpretations would not be very strongly supported by the legislative provisions.

Fixed FESL levy component

• MY INTERPRETATION: CA assessments are to pay the full FESL fixed charge based on their FESL classification (regardless of the percentage of land under a CA). FESLB does not cater for an apportionment or reduction of the FESL fixed charge component for CA land and S555 (3) of the LGA is irrelevant for altering/determining a FESL fixed levy component.

• ***Again, I think your interpretation is the correct one.

[Author]

Posts