Distributive Justice, Ordinary Rates and the Categorisation of Land for Rating Purposes in New South Wales: An Update
(2014) 19 Local Government Law Journal 3, 3-22
21 Pages Posted: 31 Jul 2014
Date Written: July 30, 2014
The taxation of property, in the form of land rates, has traditionally served as one of the main sources of revenue for local government authorities throughout the world. Revenue raised from rates is often allocated by local government to the funding of vital infrastructure services and amenity facilities. In New South Wales, there are two types of rates that can be made by a local council: ordinary rates and special rates. This article is concerned with the former. Before a local council may make an ordinary rate for a parcel of rateable land, it is required to have declared that parcel of land to be within one of the following categories: farmland, residential, mining or business. Stakeholders will often attempt to secure, for themselves, the best possible rating outcome they can. This can often turn upon the category that a parcel of land has been classified as for the purposes of ordinary rates. Distributive inequities or injustices may flow from the inappropriate categorisation of land for rating purposes. With this in mind, this article examines a recent decision of the Land and Environment Court which provides timely and important insights into the categorisation of land for the purposes of ordinary rates in NSW. It is argued that this decision indicates that there are two key factors to be considered in determining the category of a parcel of land for such purposes: statutory interpretation and construction, and actual or existing use of land. This article also suggests that other factors which may possibly influence categorisation, such as the owner’s intended future use of the land or the reasons behind acquisition of the land, may be regarded as ancillary or supplementary at best, or immaterial at worst. The case examined in this article also provides lessons for local councils with respect to approaching the task of categorising parcels of land for the purposes of ordinary rates.
Keywords: local government, New South Wales, categorisation of land for rating purposes, ordinary rates, distributive justice
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