Rates (tax)

This article is about the property tax system. For the burden ratio at which a business or person is taxed, seeTax rate.

"Ratepayers" redirects here. For the political label, seeRatepayers' Association.

Ratesare a type ofproperty taxsystem in theUnited Kingdom,and in places with systems deriving from the British one, the proceeds of which are used to fundlocal government.Some other countries have taxes with a more or less comparable role, likeFrance'staxe d'habitation.

Rates by country

Australia

Local government authorities levy annual taxes, which are called council rates or shire rates. The basis on which these charges can be calculated varies from state to state, but is usually based in some way on the value of property. Even within states, individual local government authorities can often choose the specific basis of rates – for example, it may be on the rental value of houses (as inWestern Australia) or on the unimproved land value (as inNew South Wales). These rateable valuations are usually determined by astatutory authority,and are subject to periodic revision.

Canada

Main article:Taxation in Canada § Property taxes

Rates are referred to as property taxes in Canada. These taxes are collected primarily by municipal governments on residential, industrial and commercial properties and are their main source of funding.

Hong Kong

Main article:Rates in Hong Kong

Levied on domestic property as well as non-domestic premises. Prior to 2000, it was used to fund municipal services, the responsibility of the now-abolishedUrban CouncilandRegional Council,through theUrban Services DepartmentandRegional Services Department.The revenue now goes to theTreasury.The bill is issued quarterly.

Ireland

Business rates and domestic rates existed in Ireland as part of theUnited Kingdom of Great Britain and Irelandand were retained after independence. Business or commercial rates are still collected.Fianna Fáilpromised to abolish domestic rates in its1977 general electionmanifesto, won a landslide, and implemented this with effect from 1979.Local authoritieslost 33% of their budget and made cutbacks. From the mid 1980s until 1997, most levied "water charges" to make up part of the shortfall.In 2013 aLocal Property Tax(LPT) was introduced, which has been compared to the reintroduction of domestic rates; one difference is that LPT is collected centrally by theRevenue Commissionersbefore being disbursed to the local authorities.

Israel

Israelhas a similar tax known asarnonathat goes back to the days of theBritish Mandate of Palestine.It is levied by the municipality (or, in smaller localities, by theRegional Councilbased (currently) on the square meterage of dwelling or business. Specific rates vary widely among municipalities, withJerusalemandRehovothaving the highest rates in the country. In rental dwellings, tenants (rather than owners) generally pay the arnona.Single parents and some forms of economic hardship qualify for discounts or even exemptions.

New Zealand

InNew Zealand,rates have provided the major source of revenue forterritorial authoritiessince the late-19th century. Rates are basically a tax on real property. For the year ended June 2005,rates made up 56% of local-authority operating-revenue.

Almost all property owners in New Zealand pay rates; those who do so are referred to asratepayers.People who rent property do not pay rates directly, but property owners will take account of the cost of rates when they set the rent. As a result, those who rent properties also have an interest in the level of rates, as well as in the services provided by councils using these rates.

Some types of property are exempt from rate levies - government land and rail land, for example. Other categories of property may possibly only be rated at 50% (land used for some types of sports purposes).Māori land- particularly where ownership and therefore liability for rates are hard to establish - can also get special treatment. Exceptions are listed in Schedule 1 Part 1 of theLocal Government (Rating) Act 2002.

Territorial authorities may assess property values in three different ways – on the basis of land, annual or capital value – using valuations prepared in accordance with the Rating Valuations Act 1998. The valuation process is overseen by theValuer-General.Each local authority, after consulting with their community, can decide which basis to use.

Councils can use a mix of these different methodologies when assessing rates based on the value of holdings, for example land value for its general rate and capital value for a targeted rate.

Councils can also levy flat charges per rating unit (i.e. each lot of land, with some exceptions where multiple adjacent lots may be considered one rating unit if in common ownership, or where multiple dwelling-units are on a single lot) - generally called a uniform annual general charge.Other methodologies also exist, such as a charge per toilet bowl or urinal, or a water charge per cubic metre of water supplied.

TheLocal Government (Rating) Act 2002 is the governing legislation and provides a number of options for setting rates, such that local authorities can use combinations of general rates, targeted rates and/or uniform annual general charges.

United Kingdom

Main article:Rates in the United Kingdom

Rates in the United Kingdom are a tax on property used to provide some of the funding of local government.

Domestic rates, split into regional and district rates, are currently collected inNorthern Ireland.They were collected in England and Wales before 1990 and in Scotland before 1989. Outside Northern IrelandCouncil Taxis collected instead of domestic rates.

Business rates are collected throughout the United Kingdom, with different systems inEngland,inWales,inNorthern Irelandand inScotland.

United States

Main article:Property tax in the United States

In the US, real estate taxes which are based on a percentage of the property's actual or nominal value are referred to as "property taxes". The term "rates" is not used in this context. Property taxes are the prime funding method for local government (i.e.,counties, cities, townships, etc.), and are normally paid by the property owner, regardless of whether the property owner lives on the property.

See also

• Property tax
• Tax bracket,for income and not for property value

Sources

Books

• Dobson, Alban; Hull, Hubert (1931).The Land Drainage Act 1930.Oxford University Press.

External links

• "Rate (taxes)".New International Encyclopedia.1905.
• "Rate".Encyclopædia Britannica(11th ed.). 1911.