The costs and benefits of changing local council rate setting
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IPART is proposing to move from the unimproved value (UV) of land approach to rate setting to the capital improved value (CIV) approach. This is expected to allow for additional growth in rate revenue ‘outside the peg’, which will more closely align rate revenue with the increasing demand for council services, as a result of population and business growth.
Revenue growth ‘outside the peg’ is currently around 0.2 per cent per year.
By contrast, IPART estimates that under a CIV approach revenue growth ‘outside the peg’ could be around 0.9 per cent per year.
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