15% cap on Dorset rate rise

June 26, 2024

By Rachel Williams

A general rate cap of 15 per cent will be applied to Dorset Council rates in a bid to prevent some property owners paying a massive 383 per cent increase as a result of Fresh Valuations.

Commissioner Andrew Wardlaw on Monday night approved a general rate revenue increase for the entire municipality of 5.7 per cent. Extra rates and charges will provide $673,000 in revenue to improve operating income.

But, despite the rate increase, the council is forecasting an underlying deficit of $459,000 for the financial year, with plans to return to surplus within three years.

Road maintenance, waste management, employee costs and depreciation expenditure have all risen, adding to the budget burden.

Entry to the Scottsdale Aquatic Centre will remain free and major projects such as the Scottsdale to Lilydale Rail Trail, access improvements at Bridport’s Croquet Lawn Beach, upgrades at playgrounds in Scottsdale, Branxholm and Winnaleah, as well as over $2.3 million for road works across the municipality, have been budgeted for in the total $8.8 million capital works package.

The new rate recommendation includes the introduction of a 15 per cent cap to mitigate the impacts of fresh valuations by the Valuer General, which has seen the Assessed Annual Value of some homes drastically increase.

A property’s AAV is used by council to calculate each rates bill.

Commissioner Wardlaw approved the new rate of 5.318 cents in the dollar on the AAV of all rateable land.

This means an average house in Scottsdale, at $405,000, could expect to pay $862 per annum in rates. 

A $1m home in Bridport would pay $2,127, however if, for example, the same Bridport home paid $1800 last year, the 15% cap would apply, and they’d only pay $2,070 this year.

Property predominantly used for short stay visitor accommodation will continue to be charged double the rate, at 10.636 cents.

New variations will be introduced for Forestry land, which will increase slightly to 6.192 cents, while rates for the Cape Portland wind farm will increase to 7.421 cents in the dollar.

The Council said it had previously been budgeting on a six per cent rise overall as part of its Long Term Financial Plan but revised it downwards to 5.7 per cent, citing cost of living pressures and the impacts of the new property valuations, which come into effect from July 1.

Corporate Services Acting Director Lauren Tolputt said Fresh Valuations had seen property values generally rise by 38 per cent - 1500 properties across the municipality have seen an even greater valuation increase ranging from 39% to 471%.

Ms Tolputt said by capping the general rate increase at 15 per cent, the impacts of new property valuations would be passed on to ratepayers incrementally, rather than via a “sudden and substantial increase in rates in the first year following a Fresh Valuation”.

“Without intervention, this would have equated to an average general rate increase of 21 per cent or $186 per annum for non-vacant residential ratepayers, with some set to experience a general rate increase as large as 363 per cent or $1958 per annum,” she said.

“In practice, rate capping would mean that no ratepayer will pay over 15% more than their 2023/24 general rate except in cases of major property changes such as new construction. 

“It does redistribute the rate burden slightly between individual properties and land categories, however ensures a fairer result for the majority.

“As long as rate capping continues to be applied between now and the next Fresh Valuation which is scheduled for 2030, ratepayers will effectively have their new valuation passed on incrementally at a rate of 15% per year. 

Commissioner Wardlaw said the cap was designed to provide a buffer for ratepayers.

“We expect most ratepayers to be out of the cap after three years,” he said.

“There are always going to be winners and losers, but we are trying to find the fairest situation and I think we have found a balance.”

There was no one in the public gallery when he made the resolution. 

He said council was in a healthy financial position with cash reserves and praised the work of staff and its efforts to complete strategic and annual plan initiatives after a challenging period, including the last 11 months of the Board of Inquiry.

Break O’Day Council has increased its rate by 3.5 per cent but was not subject to the latest round of Valuer General reassessments, which is due for that municipality in 2026.