Australian Capital Territory
Taxation Administration (Rates) Determination 2016 (No 1)
Disallowable instrument DI2016-110
made under the  
Taxation Administration Act 1999, s139 (Determination of amounts payable under tax laws)
EXPLANATORY STATEMENT

1.	This Disallowable Instrument commences on 1 July 2016.

2.	As part of the 2016-17 Budget, the Government announced that it would continue to reform the Territory’s taxation system. Further reform to the general rates system will continue with the 2016-17 Budget.  

3.	General rates are levied on residential, commercial and rural properties to provide funding for a wide range of essential services to the Canberra community, including municipal services, schools, roads and hospitals.

4.	Under section 139 of the Taxation Administration Act 1999, the Minister has the authority to determine, in writing by disallowable instrument, amounts and rates applicable for the Rates Act 2004.

5.	This instrument determines the variable rating factors for the purpose of the calculation of rates payable under the Rates Act 2004.

6.	This instrument determines different amounts for the FC or fixed charge and the P or percentage rate for section 14 (3) of the Rates Act 2004.

7.	This instrument determines the fixed charge for a parcel of commercial land, the fixed charge for a parcel of residential land, the percentage rates for a parcel of commercial land, and the percentage rates for a parcel of residential land. The values are determined for section 34 (4) of the Rates Act 2004.

8.	For section 14 (3) of the Rates Act 2004, the fixed charge (FC) for 2016‑17 is determined at:
•	$765 for residential land (increased from $730 in 2015-16);
•	$2,235 for commercial land (increased from $2,130 in 2015‑16); and
•	$150 for rural land (remains unchanged from 2015-16).

9.	For section 14 (3) of the Rates Act 2004 the instrument determines the different amounts for percentage rates. Table 1 provides the thresholds and rates for residential, commercial, and rural land.

10.	A new threshold for unimproved residential land values of over $600,000 with a higher marginal rate has been introduced, as announced in the 2016‑17 Budget. This will rebalance the general rates burden and lower the burden for residential properties with medium average unimproved values. 

11.	A new threshold for unimproved commercial land values of over $600,000 with a higher marginal rate has also been introduced, as announced in the 2016‑17 Budget.  This will increase the progressivity of the general rates scale for commercial properties. 

12.	Calculation of general rates for residential land is as follows:
•	The owner of land which has an average unimproved land value of $150,000 or less will be assessed at a rate of 0.2746% (remains unchanged from 2015-16).
•	The owner of land which has an average unimproved land value of between $150,001 and $300,000 will be assessed at $411.90 plus 0.3900% (increased from 0.3857% in 2015-16) on the average unimproved value above $150,000.
•	The owner of land which has an average unimproved land value of between $300,001 and $450,000 will be assessed at $996.90 plus 0.4800% (increased from 0.4629% in 2015-16) on the average unimproved value above $300,000.
•	The owner of land which has an average unimproved land value of between $450,001 and $600,000 will be assessed at $1,716.90 plus 0.5400% (increased from 0.5339% in 2015-16) on the average unimproved value above $450,000.
•	The owner of land which has an average unimproved land value greater than $600,000 will be assessed at $2,526.90 plus 0.5750% on the average unimproved value above $600,000.

13.	Calculation of general rates for commercial land is as follows:
•	The owner of land which has an average unimproved land value of $150,000 or less will be assessed at a rate of 2.8000% (increased from 2.6274% in 2015-16).
•	The owner of land which has an average unimproved land value of between $150,001 and $275,000 will be assessed at $4,200.00 plus 3.3000% (increased from 3.0467% in 2015-16) on the average unimproved value above $150,000.
•	The owner of land which has an average unimproved land value of between $275,001 and $600,000 will be assessed at $8,325.00 plus 4.6600% (increased from 4.4339% in 2015-16) on the average unimproved value above $275,000.
•	The owner of land which has an average unimproved land value greater than $600,000 will be assessed at $23,470.00 plus 4.7700% on the average unimproved value above $600,000.

14.	The rural land rating factor has not been altered from 2015‑16 and will be assessed at a rate of 0.1468%

15.	This instrument revokes DI2015-162. DI2015-162 continues to apply to the period 1 July 2015 to 30 June 2016 inclusive.

Authorised by the Treasurer
Andrew Barr MLA