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How Rates are Determined

In the Northern Territory, council rates are a form of property taxation and property values play an important part in determining how much each individual ratepayer contributes. As it is a system of taxation the rates paid may not directly relate to the services used by each ratepayer. Generally the Act expects that the higher the value of the property the higher the rates to be paid.

In setting rates, Council must adhere to the Local Government Act. The Act allows flexibility for Council to make decisions that suit the local community. As a result, the way City of Darwin structures its' rates may differ from the way other Northern Territory councils set their rate structures, with the level of rates overall reflecting the varying costs and services provided to the local community.

Council Rates and the Budget Process

After developing strategic plans and setting the long-term objectives and priorities for the community, Council is then able to calculate what income it will receive from other sources and what it needs to raise from rates. When making decisions around rates Council balances the importance of maintaining infrastructure and services and cost increases against what it believes the community can afford in rates.

Budgets are then considered and adopted by Council. These budgets are available to the public and are set at meetings which are also open to the public.

Rate in the Dollar

Having determined the budget Council then divides that portion of the budget to be raised from rates by the total of all individual property values within the municipality to arrive at what is called a “rate in the dollar”. In this way it can multiply the “rate in the dollar” by individual property values to produce the rates bill for each property and know that in total, rates paid will equal the amount set in the budget to be raised from rates.

A person with a property valued at say $150,000 will contribute less than someone with a property valued at $300,000 in the same area. Council must review the rate in the dollar annually to ensure it only raises the budgeted rate revenue requirement. As a result of this, Council does not therefore gain windfalls from valuation increases. Valuations do not determine the rates income of Council but are used only to divide the total rates amount among individual ratepayers.

Differential Rating

Council has a number of options that it can use in determining how the rates will be structured. The City of Darwin currently uses differential rates, based upon town planning zones. This means that all properties that are zoned the same are rated using the same rate in the dollar.

Minimum rates

Council also utilises a minimum rate charge which is a mechanism by which lower valued properties pay not less than a flat (minimum) amount determined by Council. Generally, only a small portion of all properties – around 30% - pay a minimum rate.

OWN PLANNING ZONE

(% of UCV)

MINIMUM

SD, RR, RL, R

0.420575%

$1091

MD, MR, HR

0.420575%

$1147

CV

0.399922%

$1091

CB

0.485422%

$1381

PS, CN

0.374146%

$1138

OR

0.338519%

$450

FD, SU, CP, CL, RD, U

0.420575%

$1147

C, SC

0.555719%

$1138

TC, HT

0.566387%

$1138

LI

0.340492%

$1138

GI, DV

0.288145%

$1138

Other Rates, Levies or Charges

There may be other rates, charges or levies that apply to a particular property. These could include garbage charges or car parking shortfall levy. These costs are applied on top of the general rates charge and may only be applied to those affected.

More Information

8930 0551

rates@darwin.nt.gov.au

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