Review of the Local Government Rating System

About the project

In December 2015 the NSW Premier engaged IPART to conduct a review of the Local Government rating system in NSW.

The purpose of the review was to develop recommendations to improve the equity and efficiency of the rating system, in order to enhance councils’ ability to implement sustainable fiscal policies over the long term.

In April 2016 IPART released an Issues Paper for its review of the Local Government Rating System.

Subsequently in June 2019 the NSW Government released IPART’s final report “Review of the Local Government Rating System – Final Report December 2016”.

The IPART Review considered:

  • The valuation method used to calculate rates.
  • Rating categories.
  • The way in which councils’ total income increases as population increases.
  • The distribution of rates across different ratepayers; and
  • the eligibility and design of exemptions and concessions.

One of the most significant issues identified in IPART’s report is the recommendation to mandate Capital Improved Value (CIV) as the basis for setting rates in metropolitan council areas.

The CIV method values the property based on the market value, or the value inclusive of all capital improvements.

Currently the valuation method for setting rates in NSW is the Unimproved Land Value (UV) which values the property excluding the value of buildings, structures and other capital improvements. This valuation method is used in NSW and Queensland. IPART discusses these two valuation methods in more detail in its final report.

Council tabled a Report to the Ordinary Meeting of Council on 20 August 2019 which outlines Council’s views and feedback to key recommendations made by IPART in its Final Report “Review of Local Government Rating System”. The report can be viewed by accessing Council’s business papers on Council’s website.

Consultation feedback

The NSW Government is now seeking feedback from councils, the community and other institutions and stakeholders on recommendations in the final report. 

How to make a submission

Submissions can be made to the Office of Local Government (OLG) online by 5pm on Friday 13 September 2019 using the following link:

Click here to make a submission to the Office of Local Government

All residents are invited to provide feedback on IPART’s final report.

More information

Further information on the Rating system review is also available on IPART’s local government webpage.

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