The majority of a council's income comes from taxes on property (land and buildings) called rates.

Each year owners of property - including houses, farms and businesses - must pay rates to the council. The amount paid depends on the value of their property. Generally, the higher the value of the property, the higher the rates to be paid. Property values are generally set by the Office of the Valuer-General or an authorised private valuer, not the councils.

There are some organisations that are either not required to pay rates at all on their property or pay a significantly reduced amount in council rates. Organisations that fall into this category include the state and federal governments, charities, churches, hospitals and schools.

Before collecting any rates, a council first establishes exactly what services and programs it will provide in the next financial year and how much those services and programs are expected to cost. The amount of money that will be collected from other sources is also estimated. The council can then work out how much money must be collected from the community in the form of council rates to meet its financial responsibilities for the coming year. The council formally adopts an annual business plan and budget after releasing the draft for consultation.

The council discussions are open to the public and all relevant documents, including council policies, are available to the public on the council websites.

Each council must adopt its annual business plan and budget and declare general rates by 15 August each year [Local Government Act 1999 (SA) s 123(8), s 153(5)]. Adopted annual business plans must include a statement about any changes from draft business plans and the reasons why [s 123(6a)]. Under the Local Government (Financial Management) Regulations 2011 (SA), councils are required to report on expected changes to general rate revenue in their annual business plans, and enable comparability between councils. This enables ratepayers to understand and engage with councils about this decision more easily.

Within the framework of the Local Government Act 1999 (SA), there is some degree of flexibility to allow councils to take into account local issues. Therefore, the way one council sets its rates may be different to that of another council and the level of rates overall reflects different costs and service provision levels.

A council must set a policy on how it will determine rates [s 123]. The rating policy outlines the council’s approach to the setting and collecting of rates from the community. This process helps to ensure accountability.

More information about rates can be found on the Local Government Association website.

After a council sets its rates for the year it sends out a rates notice or invoice setting out how the rates can be paid. Included on this notice is a brief summary of the council's rating policy, details about how to object to the property valuation, and details of any rebate, remission, concession or deduction that applies [Local Government (General) Regulations 2013 (SA) reg 17].

Objecting to a property valuation needs to be done within 60 days of receiving the first rates notice and must be in writing to the Office of the Valuer-General. Rates are still due by the due date even if an objection has been lodged. Objections can be lodged online here.

Failure to pay rates on the due date results in fines and interest owing [s 181(8)] and results in a debt which may be referred to a debt collection agency for collection. In extreme cases, a council can sell a property to recover unpaid rates. Under the Local Government Act 1999 (SA), a council may sell land for non-payment of rates that have been outstanding for 3 years or more [s 184]. Property owners have until the date of the auction to pay outstanding rates and council costs relating to the intended sale [s 184(9)].

Rates relief

People finding it difficult to pay their council rates on time may be able to enter into a more flexible payment arrangement with their council. Special rebates may also be available in certain circumstances. Seniors may also apply to their council to postpone payment of a portion of rates on their principal place of residence, with repayments not due until the property is sold or disposed of (however, interest may accrue). More information is available on council websites.

Other concessions may also be available. For information, contact the ConcessionsSA Hotline on 1800 307 758 (9 am to 5 pm, Monday to Friday).