[Andrea Dolan]

Hi,

Following on from Neil’s question in regards to when the cancellation of levies is implemented, it got me thinking as to why we all do it differently.

At CBCity we do it on a quarterly basis, to align with pension rebate/writebacks and quarterly “billing”. So I’m interested in knowing why councils do it on a date of registration basis? Would you be able to provide me with background information as to why you do it the way you do, and how it is written in your revenue and/or council policy, so I can have an informed view of reassessing our process.

Thanks
Andrea

[Michael Cherry]

Hi Andrea,
Our Revenue Policy contains the following simple statement.
“Use of land values on newly created property”

“Upon registration of a plan of subdivision or consolidation with the Registrar General, City of Newcastle will rate the property(s) within the plan from the registration date of the Deposited or Strata Plan.”

The basis for rating from the date of registration was predicated on a legal opinion we obtained many years ago. The opinion said something along the lines of that the original unsubdivided parcel of land ceases to exist as an entity when a new plan of subdivision is registered over that land. This means that rates can’t be levied on land which no longer exists – hence waiting until the following quarter isn’t appropriate based on the opinion.

Using the legal opinion as the basis – rating from the date of registration importantly also maximized the revenue we could generate as opposed to quarterly rating.

I trust this helps.

Mick

[Susan Scott]

Hi Michael, Do you happen to know how that legal opinion circumvented the Valuation of Land Act Part 5 Item 62?

[Michael Cherry]

Hi Susan,
Briefly, the advice we have is along the lines of the effects section 14B (1) and (2) of the VL Act means that even where parcel of land comes into existence after 1 July in any particular year, the valuation of that parcel is made at the 1 July of that year. Additionally, s27B (6) means the valuations of the new lots are inserted in the Council’s current valuation list as at 1 July of the rate year current at the time of the registration of the plan of subdivision.

This satisfies the requirements of s62. I have sent you some additional information also.

Hope this helps.

Mick

[Robert Hay]

Hi Everyone

Further to Mick’s comment I would like to draw everyone attention to page 110 of the Rating and Revenue raising manual which aligns with the legal opinion obtained by Newcastle which I have copied below:

Following the sub-division of a parcel of land, rates cannot be levied on new lots until supplementary valuations have been provided to the council by the Valuer General and the council has categorised each of the new parcels. Once this has happened, rates can be levied on a pro-rata basis from the date the deposited plan was registered. If a council levies rates on new parcels of land on a pro-rata basis, an adjustment must be made in respect of the parcel of land that existed prior to the sub-division to reflect that rates and charges are only payable on that parcel up until the date of sub-division. The levying of rates mid year will not adversely affect a council’s maximum general
income limit as supplementary valuations furnished during the year are included when the notional general income for the previous year is calculated. Although the legislation does allow councils to levy rates on newly sub-divided
parcels mid-year, it does not however compel them to do so. The decision on when to levy rates on these properties is one for each council.

I urge everyone do some modelling and see how this affects your Council, for some it maybe beneficial for other not so much.

This has been done by lots of Council’s both metro and regional for many years and I have not heard of one court case where this practice has ever been challenged.

Hope this helps

• This reply was modified 5 years, 3 months ago by Andrew Butcher.

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