Rate surge for some, pleasant surprise for others

SOUTH Gippsland’s average property valuation increase across the shire was just under 37 percent for the year to the start of January 2022.

Venus Bay recorded a staggering average rise of 77.92 percent, reflecting the surge in the value of coastal properties.

The popular tourist destination is part of the shire’s Coastal-Promontory Ward, which had an average property value rise of 48.47 percent for the year.

This year some ratepayers are in for a nasty shock when they receive their rate notices, but others will get a pleasant surprise, with an increase in property value not always meaning higher rates, and some people set to pay less than last year.

While the average rate notice rises by 1.75 percent, in line with the Victorian Government’s statewide rate cap, the applicable rates for individual properties vary greatly based on their valuation relative to other properties in the shire.

“The key issue in determining your share of the 1.75 percent rate cap increase is how your property valuation has moved in comparison to the average movement of other properties in South Gippsland,” council states.

Its accounting systems coordinator Stuart Smith explained how that works in theory.

“The average property valuation increase is 37 percent, so if everyone’s property increased by that amount, everyone would get a 1.75 percent rate rise,” Mr Smith said.

Therefore, those whose properties have risen in value more sharply than the shire-wide average face a rate increase of above 1.75 percent, while others will benefit from their properties having risen in value at a lower rate than the shire-wide average.

With Venus Bay properties skyrocketing in value at over double the shire-wide average, its residents are among those to suffer bill shock when they open their rate notices.

They face an average rate hike of $476 more than last year, equating to a 33.67 percent average rate rise.

While Foster’s average property valuation rose from $462,246 last year to $612,096 this year, an average increase of $149,850, or a 32.42 percent average rise, its residents will enjoy a 2.37 percent average reduction in their rates this year.

They’ll save almost $46 on average compared to last year.

Properties are valued each year for rating and for land tax, Mr Smith said, explaining that is a requirement.

“Valuers use comparative property sales, rental data, location, size, age and condition of a property to determine each property’s individual valuation,” Mr Smith said.

South Gippsland Shire residents who believe their properties have been overvalued have 60 days to object to the valuation.

Until the end of June, South Gippsland Shire Council had its own internal valuers, being one of three Victorian councils to opt out of relying on centralised valuations, something that is no longer permitted for future valuations.

The Victorian Government’s Valuer General certified the overall valuation of council’s internal valuers, forming the basis of this year’s rates notices.

Those who wish to lodge an objection are encouraged to contact council’s rates team, with relevant details provided on rates notices.

It should be noted that the valuation is determined based on the existing market conditions at the start of January this year.

The rates team can also assist with arranging a payment plan for anyone with concerns about their ability to pay their rates, with people encouraged to make contact as soon as possible if that applies.

Rate cap more challenging in rural setting

SOUTH Gippsland Shire and other rural councils feel the impact of State Government imposed rate capping more acutely than metropolitan councils.

Council’s performance and innovation director Allison Jones and mayor Mohya Davies spoke of the challenges involved in providing the services and facilities required by South Gippsland communities, within the constraints of the 1.75 percent rate cap.

While metropolitan councils are bound by the same rate cap, their circumstances are vastly different in terms of reliance on rate revenue and the expenses they face, the pair argue.

“City of Port Phillip can raise $60 million in parking (revenue), and therefore they can have lower rates,” Ms Jones said by way of example of the rate cap divide she perceives.

“It can impact what councils are going to be able to do in terms of maintaining infrastructure,” Cr Davies said of rate capping’s effect in a rural setting.

She pointed to the present increased cost of construction and the fact the shire’s extensive road network costs a fortune to maintain.

“It means that we’re going backwards,” Cr Davies said of the inability to generate the required level of revenue through rates.

Council’s accounting systems coordinator Stuart Smith elaborated on the vast differences between rural and metropolitan councils and their rate revenue requirements.

He said the City of Stonnington, for example, has a population of 106,000 people, 164 kilometres of sealed roads, no unsealed roads, and a total land area of 26 square kilometres.

“When you compare that to South Gippsland, we’ve got 30,000 people, 820 kilometres of sealed roads and 1,280 kilometres of unsealed roads which we have to maintain, and our total land area is 3,300 square kilometres,” Mr Smith said.

“Mathematically, that is why rural councils bear the burden of needing to have higher rates to pay for the services we provide,” he said of the need to provide required services and infrastructure to a much smaller population distributed over a far larger area.

The distance between South Gippsland towns also requires duplication of infrastructure such as swimming pools and associated maintenance, further adding to costs and the need to raise sufficient revenue.