In December of last year, Premier Mike Baird issued the
Independent Pricing and Regulatory Tribunal
("IPART") with Terms of Reference to
undertake a review of the Local Government rating system
"...consideration of the appropriateness and impact of
current rating categories and exemption, mandatory concessions and
IPART issued a draft report in August 2016 that included the
draft recommendation that rate exemptions be modified so they are
"General exemptions should be based on land use not
land ownership, and land used for commercial or residential
purposes should not be exempt, regardless of who owns
Should this draft recommendation be finalised and accepted, the
full or partial rate exemptions currently provided to organisations
on the basis of their charitable, religious, educational or public
benefit purpose would appear likely to be reviewed, and in some
instances be in serious jeopardy.
Particularly, under this draft reform, land classified as being
used for either "commercial activities" or
"residential purposes" may be automatically and strictly
excluded from any exemption.
IPART currently considers activity to be "commercial
activity" if it:
involves the selling of goods and/or services
is provided at more than a nominal consideration*
is undertaken on an ongoing basis
is not the provision of a public service
*Nominal consideration is defined by IPART as below 50% of
market value (75% for supply of accommodation).
IPART currently considers "residential
purposes" to include situations where a property is:
predominantly used as a place to live
occupied by the same resident continuously for periods of three
months or greater
and would include residences such as Community Housing
developments, retirement villages and student accommodation
provided on University campuses.
Further, IPART is specifically considering a recommendation that
the exemption from paying rates on land owned by Public Benevolent
Institutions ("PBIs") used for residential purposes or
commercial activities be scrapped since:
"an exemption provides PBIs with a cost advantage over
private providers of social or low cost housing......In areas where
social housing is growing, it leads to councils trying to deliver
more services with a smaller rate base. This is
Organisations dedicated to charitable, religious, educational or
benevolent work are engaged in the provision of vital public
services to the NSW community, and the loss of full or partial rate
exemptions on land they own that is used in connection with their
exempt purpose could reduce their ability to provide these services
in the future.
Submissions to IPART in relation to this draft report are due by
14 October 2016.
This NT case was the first decision to order compensation for loss or impairment of native title rights and interests.
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