Ararat Rural City Council's Draft 2021-22 Budget includes a 1.5 per cent cut to rates.
This means council has overseen a net zero per cent rate increase since the 2018-19 budget.
Ararat Rural City Council Mayor Jo Armstrong states in her introduction to the budget that this figure sets Ararat apart from other Victorian councils.
"There are 79 councils in Victoria, with the next lowest shift in the rate burden over this period an increase of 4.75 per cent and the highest 18 per cent," she said.
The cut to rates does not mean each ratepayer will pay 1.5 per cent less than during the 2020-21 financial year.
Rates are also partially determined by the market value of a property and what sector a ratepayer's property falls under, such as general/residential, commercial, industrial, or farming.
The type of property a ratepayer owns affects their "rate in the dollar". This is the figure that is multiplied with the expected market value of a property to determine the amount a ratepayer owes.
For example, in 2020-21 the "rate in the dollar" for a residential property in Ararat Rural City was 0.00628.
This means if a ratepayer owned a residential property worth $500,000, they would owe $3140 in rates (excluding additional charges such as municipal charges, fire services levy, and waste and recycle collection charge).
However, in 2020-21 the "rate in the dollar" for a farming property was just 0.002952. A farming property worth $500,000 would therefore warrant just $1476 in rates.
A further factor is the "Pie Model" Ararat Rural City Council uses. This model aims to ensure the rate burden on each sector remains largely the same each year.
This means that even while farmland prices have dramatically risen in the past 12 months, the farming sector will continue to account for about 40 per cent of the rate burden.
Therefore, if someone lives on a farming property and its valuation has increased by about 30 per cent in the past 12 months, the Pie Model will stop their rates from increasing by the same margin.
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