Fairness the key to rate change application

The City of Swan will look to change its rating classification on about 20 properties in the Swan Valley to improve fairness to owners of similarly used land throughout the region.

The move comes after a regular rating review and survey carried out by the City identified properties that have been rated in the wrong category. The properties have been rated charges applicable to rural land use despite the fact the predominant use is commercial. 

Of the 19 potentially-affected properties identified in the City’s survey, only one owner objected to the proposed change and a submission was received and considered by the City.

The objection, after investigation, was not supported and after further assessment, was identified as commercial in nature.

The City will approach Local Government Minister, Ljiljanna Ravlich asking for consent to change the basis of rates on the identified properties.

“Most properties in the Swan Valley are rated on unimproved value, as the area is predominantly a rural region. However, the use of some properties has changed over recent years to the point where the predominant or sole use is commercial, not rural,” City Chief Executive Officer, Mr Eric Lumsden, said.

“Some of these properties are already being rated in the right category, but others are not and this move will address this imbalance.

“There is no doubt that the identified properties are predominantly used for non-rural purposes and should be rated as such in the interest of fairness.”

The rating valuation method being used on these 19 properties is ‘Rural Unimproved’, which does not take into account the improvements and commercial operation of properties. 

This is considered unfair for genuinely rural properties and for commercial properties being rated on ‘Gross Rental Value’ (annual rental value of the improvements such as buildings).

“Where the status of rural properties has changed and the predominant use relates to a commercial activity, then the rating method should also change. This type of review routinely occurs and is not a specific attack on certain property owners,” Mr Lumsden said.

The Valuer General is currently reviewing all gross rental values of properties as part of the three-yearly revaluation process. The City has been advised to expect large increases in the values for properties in the Swan Valley.

NOTE:

Under Section 6.28 of the Local Government Act, where the land use of a property is predominantly rural, the basis of rating is to be the Unimproved Value (UV) of the land. This is based on the value of the land itself, without regard to any improvements. 

Where the land use is predominantly non-rural, the basis of rating is to be the Gross Rental Value (GRV). This is based on an annual rental value of the improvements.

The City of Swan uses both rating methods. The City also uses differential rating to separate GRV properties into Residential, Commercial and Industrial - which is currently under review. In addition, the City also uses differential rates to separate UV properties into General Rural, Rural Concession and Special Rural Areas.

The Valuer Generals Office determines the value of properties, not the City of Swan. GRVs are re-valued every three years and UVs are re-valued every year.

For GRVs a fair weekly value is determined for the property by the Valuer General's Office through analysing the current market rental values in the area or from an inspection. The value provided is divided by 52 to determine the weekly gross rental value for the property.
UVs are determined by the approximate dollar value of the land and provided by the Valuer General’s Office.

Properties potentially affected by the rating change:

1.    10 John Street, Henley Brook (The Mallard Duck)
2.    5601 West Swan Road, West Swan (The Old Cottage Café)
3.    141 Caversham Avenue, Caversham (Caversham House)
4.    9810 West Swan Road, Henley Brook (Henley Park Estate)
5.    152 Haddrill Road, Baskerville (Feral Brewery)
6.    10070 West Swan Road, Henley Brook (The River Retreat)
7.    640 Great Northern Highway, Herne Hill (Swan Valley Cheese Company)
8.    506 Great Northern Highway, Middle Swan (Waldeck on Vines)
9.    45 Casuarina Place, Henley Brook (Grandis Cottages)
10.    Lot 57 West Swan Road, West Swan (Margaret River Chocolate   Company)
11.    24 Henley Street, Henley Brook (Valley View Restaurant)
12.    11111 West Swan Road, West Swan (Merich Estate)
13.    10250 West Swan Road West Swan (Swan Valley Oasis)
14.    10581 West Swan Road, West Swan (Milston Gardens)
15.    1235 Great Northern Hwy, Upper Swan (Brookleigh Estates)
16.    1231 Great Northern Hwy, Upper Swan (Brookleigh Estates)
17.    258 Lennard Street, Herne Hill (Yeltrah Gallery)
18.    50 Anglesea Crescent, Belhus (Tampara Colonial Homestead)
19.    72 Bisdee Road, Millendon (Susannah Brook Cottages)

News Article Date: 3/3/2005

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