Reporting to Council
23 Mar 2021
How are business rates charged now?
We need to harmonise rates so we have a consistent, fair and equitable rates system across the Northern Beaches.
At present, business rates are still being charged three different ways.
As you can see from the chart below, ordinary business ratepayers in the former Warringah area are currently paying higher rates than the Northern Beaches Council average (per $100,000 of land value).
Ordinary business ratepayers within the former Manly and Pittwater areas are paying less than the average.
What needs to change?
We are striving for a harmonisation model that balances the outcomes for all ratepayers and limits any sudden, unexpected impacts for the majority of ratepayers.
Four scenario were extensively modelled over the last six months using the minimum rates used by the three former council areas.
The following table relates only to ordinary business ratepayers.
Scenario 4 introduces a new minimum rate for all Northern Beaches properties, based on the weighted average of the former council areas minimum rates for ordinary business ratepayers.
This model delivers a rates decrease to 62 percent of ratepayers within the ordinary business category.
Please refer to the tables below for the estimated changes to ratepayers in each of the former council areas within the ordinary business category without gradual harmonisation. These estimates exclude the annual rate peg adjustment and any impacts of land valuation changes.
Click on the images to enlarge.
Estimated changes minimum and ad valorum rates
Estimated changes business ratepayers by land value
It’s important to note that council is not seeking to raise more funds as a result of harmonisation.
We have successfully advocated to the NSW Government for a change to legislation which will allow us to gradually implement harmonisation over four years for ad valorem ratepayers and to not make any harmonisation changes until 1 July 2022.
The gradual harmonisation of rates and our ability to not apply any changes until 1 July 2022 are subject to the passing of proposed legislation by the state government as well as the adoption of these changes by the elected Council.
Shopping centres, shopping districts and strata storage
Within the rating structure of the former Manly area the minimum rate for the Manly CBD (*Manly Business Centre, The Corso and ocean beach front) ordinary business sub-category was the same as the minimum rate for the Ordinary Business category. This enabled rating consistency between the ordinary business category and the Manly CBD sub-category in terms of the demand and use of council services.
We are proposing that the minimum rate for this sub-category will be the same as the minimum rate set for Northern Beaches Council ordinary business category (plus the IPART rate peg as determined for the 2021/22 financial year). This will not result in any additional income from the Manly CBD sub-category but will result in some changes in the rates levied on ratepayers on the minimum rate which will be offset by changes in the rates levied on ratepayers on an ad valorem basis.
Within the rating structure of the former Pittwater area the ad valorem rate for Warriewood Square sub-category was 10% higher than the ad valorem rate for the ordinary business category reflecting the additional services and infrastructure required to support this centre based on the relativity of land valuations.
To maintain relativity with both the existing rating structure between the ordinary category and the Warriewood Square sub-category, it is proposed to levy the business sub-category Warriewood Square at 10% more than the ad valorem rate for the new Northern Beaches ordinary business rating category.
No changes are proposed to the method of determining rates for the Warringah Mall sub-category.
No changes are proposed to the method of determining rates for the Strata Storage Unit sub-category.