Page 3367 - Week 11 - Tuesday, 12 October 1993

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represents their depreciated replacement cost and is determined by deducting from the replacement cost sufficient allowance for accrued depreciation and obsolescence.

(3) In light of the difficult budgetary situation facing the ACT

in 1993-94, a greater rating effort was required than simply

maintaining the average rate in real terms. Consequently,

based on information provided by the Australian Valuation

office, which indicated that unimproved values had increased

by an average 8.7$, the rate in the dollar was adjusted from

1.019 to 0.985 cents to achieve a 5% increase in the average

general rate. This rate applies to all residential and

commercial properties with rural properties continuing to

pay half the City Area rate. -

(4) The Government is conscious of the increasing rate burden being borne by the residential sector. To redress this increasing imbalance, the Government decided to introduce a progressive rate of land tax on a similar basis to that operating in all the States rather than moving to a differential rating system.

A differential rate would mean that one rate would apply to residential, one rate for commercial and so on. Such a system can be seen as manipulative in that it undermines the relationship between the rate burden and land values.

The change to a progressive land tax has enabled the land tax rate for properties with an unimproved value of less than $100,000 to remain at 1%, limiting the burden imposed on small business and the rented residential sector.

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