Rates are a land tax charged by councils, on people who own property in the council area.
First, the State Government Valuer-General estimates the amount of rent your property would receive a year.
Next, the cost of providing community services is calculated.
Other general income councils may get, such as fees, rent, investments or any government grants, are subtracted from the cost of services.
The remaining budget needed is then divided among property owners in the council area, by charging a percentage of the estimated rental return of each property.
The number of property owners in a council area, the rental value of those properties, and any ongoing or special needs a community may have will all impact the amount of money property owners pay in rates.
Generally valuable properties deliver higher rents, and so will pay a higher dollar amount of rates. This is why a high-rise office building in a city will be charged a higher dollar amount for rates, while a small house away from the center of town, will tend to be charged a lower dollar amount.
Rates from property owners generally pay for all the ongoing community services that councils provide.
Councils use rates to build and then sustainably operate essential community services like:
Because communities have different needs, some councils provide special services, like those listed below. On Flinders Island for example the community needs an airport. Councils may provide these types of services, where the private sector or other levels of government are not providing the service. Other examples include:
Councils are very careful to spend the community's money wisely and aim to help keep rates low. Tasmanian councils fund their ongoing work without asking for money from the State or Commonwealth.