Council rates – Frequently asked questions

What are council rates?

Rates are a form of property tax. All property owners pay rates to help fund services, programs, and the
maintenance and construction of infrastructure, for the benefit of all residents, visitors and businesses across
the entire council area.

Rates make up nearly 80 per cent of council’s income, with the remaining amount sourced through grants,
subsidies and contributions, community wastewater management system charges, user charges, statutory
charges and funds held in reserve for specific activities.

The total cost of delivering council programs, services and infrastructure for the community is largely funded
by rates.

How do councils work out the rates income they need?

All councils in South Australia prepare an Annual Business Plan and Budget which outlines the services,
programs and infrastructure works council will deliver in the coming year.

When setting the plan and budget, a council must balance the current needs and expectations of the
community with what will be required in the future to achieve the best economic, environmental and
community outcomes.

Council also needs to consider external pressures and increased costs, the amount of income available from
rates, and property owners’ ability to pay rates.

The services and programs provided by councils, and the infrastructure requirements of individual councils,
vary considerably. For example, the City of Onkaparinga has a mix of residential, industrial and rural
properties, and is considered a ‘growth council’ where population is expected to significantly increase in the
years ahead.

How are rates calculated?

To help set rates each year, council considers the amount of revenue needed to fund services, programs and
infrastructure projects that are delivered.

A property’s rates are calculated in two steps:

1. Property value x rate in the dollar = rate payable in addition to a fixed charge
2. Fixed charge + rate in the dollar amount = total rates payable

Example:
1. $250,000 (property value) x 0.00295 cents (rate in the dollar) = $737.50 (rate payable in addition to
the fixed charge)
2. $500 (fixed charge) + $737.50 (rate payable) = $1237.50

Who determines the value of a property and how is it calculated?

Property values vary across council areas and many change over time. Any changes in a property’s valuation
will be reflected in that property’s rates bill.

For example, if a property’s valuation increases compared to other properties within the council area, that
particular property’s rates will generally be higher.

Council uses property values to help calculate rates, because it’s a fair and equitable way of ensuring all
property owners contribute to council services and infrastructure for the entire region.

The value of a property is determined each year by the South Australian Government’s Office of the Valuer
General. This independent authority assesses the value of each property in line with set guidelines.

Properties in the City of Onkaparinga are assessed using ‘capital improved value’ which is the total market
value of the land plus buildings and other improvements. Information about a property’s value is included on
the rates notice issued by council.
Any property owner in Onkaparinga who doesn’t agree with their valuation can lodge an objection to the
Office of the Valuer General. Objections must be lodged within 60 days of receiving your first rates notice for
the financial year.

Before lodging a formal objection, property owners can seek further information by phoning the Office of the
Valuer General on 1300 653 346.

How is the rate in the dollar calculated?

The rate in the dollar is determined by dividing the total revenue amount required to fund council services,
program and infrastructure, less the revenue raised via the fixed charge, by the total value of all rateable
properties in the area.

Example:
$75 million (total general rate revenue) ÷ $25.4 billion (total value of properties in the council area) =
0.00295 cents (rate in the dollar)

Council can charge either a uniform rate in the dollar across all properties, or one or more differential rates.

What are differential rates?

The City of Onkaparinga uses differential rates for setting the rate in the dollar, which means setting
different rates for different categories of land use. This option is common among councils because it
achieves greater equity for all property owners.

The differential rate categories council uses are:

 residential
 commercial and industrial
 primary production
 vacant land
 other.

What is a fixed charge?

A fixed charge, sometimes called a municipal charge, is a flat charge that’s applied to all properties,
regardless of their value.

Applying a fixed charge ensures that all properties make a standard contribution towards the services,
program and infrastructure projects council provides.

The total amount raised from the fixed charge cannot be more than 50 per cent of the total revenue raised
through the combination of the fixed charge and general rates.

What are other service rates and charges?

Councils may charge a service rate or annual service charge for certain services they provide. The City of
Onkaparinga charges for community wastewater management systems. If a property is connected to a
network within council’s scheme, the service charge will appear as a separate amount on the rates notice.

What do rates pay for?

Council rates are a system of taxation, much like income tax and GST, and council determines how and
where they are spent.

Rates are not a fee for service, so the amount of rates paid by a person may not directly relate to the
services they use. People may not use all of council’s services all of the time, but they are there for everyone
in the community when needed.

The range of programs and services councils provide to the community, and the infrastructure requirements,
differ from council to council.
Some of the programs and services funded by rates income include:
 waste collection and education
 constructing new and maintaining existing infrastructure such as roads, stormwater/drainage, kerbs
and footpaths
 parks, reserves, playgrounds and skate parks
 library services, community centres and positive ageing centres
 community grants
 walking and bike trails, and shared-use paths
 aged care services and social inclusion initiatives
 youth development programs
 community health and safety services such as immunisations,
 dog control, food business inspections, and bushfire prevention inspections
 planning, development and compliance
 street lighting.

Why do I have to pay for services I don’t use?

Council rates are a system of taxation they are not a fee for service.

All residents rely on the general services and public infrastructure that council provides. They need
serviceable public roads, street signs, libraries, footpaths, parks and reserves. They visit beaches, attend
neighbourhood centres and community programs. They also expect public stormwater drainage, dog control,
development control and compliance, walking tails and recreation facilities. They enjoy art, culture and the
benefits of tourism and economic development. They also expect programs and facilities that support and
connect people of all ages such as youth centres and positive ageing centres.

Rates are required to fund such services and facilities across the entire council area.

All services and facilities are available to our entire community.

Why are Onkaparinga rates higher than neighbouring councils?

It is difficult to directly compare rates with other councils because each council is unique and has its own
requirements. Some of the factors that influence rates include growth, services, programs and facilities
provided, and future needs.

The makeup of a council differs from one council to another. For example, some councils are predominately
metropolitan residential, others have a mix of residential houses and rural properties, and there are some
who have a high concentration of commercial properties.

A council that is well established will have different infrastructure and facility requirements compared to a
council experiencing growth. Population and demographics will also shape the services a council provides
now and needs to provide in the future.

A council’s area is also a factor. It influences the kilometres of road that need to built and maintained, the
amount of street lighting required, the number and type of facilities available and the number and size of
playgrounds, parks and reserves required to name a few.

Even the environment will impact what a council needs to take into consideration. For instance, councils
along the coast must consider coastal management and cliff tops and dune protection, and councils in rural
areas need to commit more resources to bushfire prevention than those in metropolitan areas.

By way of comparison, we have included a chart to show where our average residential rates sit in relation
to other councils in metropolitan Adelaide. What this shows for Onkaparinga is that the average contribution
per household towards rates and funding of services, infrastructure and facilities is largely in line with the
average across Adelaide and at the lower end of all metropolitan councils.
 2018-19 Metro average residential rates
$2,500

Metro average $1,498

$2,000 Onkaparinga $1,539

$1,500

$1,000

$500

$0

Rates $ Metro Average

If we are a ‘growth city’, then isn’t council increasing its rate income each year and shouldn’t
my rates be coming down?
While a growth council does increase its rates income with additional property rates, population and the
need for infrastructure, services and programs increases too. Council may build and maintain new roads,
footpaths and facilities, install additional street lighting, and offer more community services and programs.
The new properties also need servicing to the same level as existing properties. Council’s current policy in
relation to rates from new properties sees 30% of this revenue servicing the new properties and the balance
of 70% servicing the new debt associated with the provision of new infrastructure and facilities.

Can property owners have a say on annual council rates and what programs and services
council provides?
By law, council must undertake formal public consultation with its community on the draft Annual Business
Plan and Budget, and draft Rating Policy.

Residents can review the draft documents and provide their feedback via a formal submission.

Council is required to consider all submissions received during the public consultation period (at least 21
days), and considers all formal feedback prior to finalising the Annual Business Plan and Budget and Rating
Policy.

Further details are available at www.onkaparingacity.com