Focus on Finance - Summer 2015 - Divide and Conquer — The effect of Subdivision on Rates

Page 10 of 12: Divide and Conquer — The effect of Subdivision on Rates

Divide and Conquer — The effect of Subdivision on Rates

When one allotment becomes several, unique questions arise regarding the imposition of rates on that land. This article answers some frequently asked questions about the rating implications of subdivisions.

An allotment is subdivided partway through a financial year. What rates apply to the new allotments for the remainder of the financial year?

Where one allotment (former allotment) is subdivided into several new allotments (subdivided allotments), the rate imposed by the Council over the former allotment continues to apply over the land as a whole.

When a valuation of land is adopted for rating purposes in respect of a financial year, the valuation as it was at the time of adoption applies unchanged (barring an objection or appeal) throughout the relevant financial year regardless of subsequent changes in the value of land. A rate cannot be adjusted mid-year by reason of any amendment or alteration of the valuation on which the rate is based other than an alteration or amendment as a result of an objection or appeal against or a review of the valuation.

It is a matter for the owners or conveyancer of the subdivided allotments to apportion that rates liability for the remainder of the financial year on whatever basis they see fit.

It is not until the new financial year that new valuations may be adopted, and the subdivided allotments will attract rates based on their individual values.

Can subdivided parcels be treated as contiguous land for rating purposes?

Councils may assess rates against either each individual piece or section of land (i.e. each Certificate of Title), or any aggregation of contiguous land subject to the same ownership or occupation. The Council may take either of these approaches provided that the same approach is taken in respect of all land within the Council’s area.

Accordingly, where an aggregation of subdivided allotments are subject to the same ownership or occupation, the Council must impose rates in respect to that aggregation (rather than each individual allotment) if, and only if, that is the approach it takes to all contiguous allotments within the Council area that are subject to the same ownership or occupation.

Should rebates be granted in respect of subdivided allotments?

A subdivision event does not give rise to any mandatory rebate requirements. However, a Council may consider granting a discretionary rebate. A Council may grant a rebate of rates or service charges where ‘the rebate is desirable for the purpose of securing the proper development of the area (or a part of the area)’.

It may be appropriate to grant a discretionary rebate of rates in respect of subdivided allotments to encourage development by the creation of additional residential allotments. On the other hand, a rebate may lead to an expectation to provide similar rebates in other similar circumstances, which may result in the granting of further rebates and decreased rates revenue. This is a matter for the discretion of each council.

Norman Waterhouse has extensive experience in advising and representing Councils on rates matters, and the review and drafting of rates and other financial documentation. For more specific information on any of the material contained in this article please do not hesitate to contact Felice D’Agostino on 8210 1202 or email This email address is being protected from spambots. You need JavaScript enabled to view it.. Alternatively you can contact Dale Mazzachi on 8210 1221 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

Felice DAgostino 

Felice D'Agostino
Ph: 8210 1202
Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 

normanwaterhouse 

Dale Mazzachi 

Dale Mazzachi
Ph: 8210 1221
Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 

 

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